The Evil Diaries: Petroceltic and Molins

3 mins. to read
The Evil Diaries: Petroceltic and Molins
Quite why Petroceltic (PCI) is 8p bid I have no idea. The bidder owns 30% already and has squared the banks. There is virtually no chance that anybody else can intrude. The price should be around 2.9p.


If you have not so far read Victor Hill’s excellent piece in yesterday’s Master Investor where he considers the pensioned service men and their claim that we’d be militarily better off staying in the EU I strongly suggest you take a minute or two.


Pension pots are important. They take a long time to build up and therefore the admin costs are significant. Admin costs are of course a total loss incurred above and beyond what would be incurred by the judicious saver. However, provided these costs are known, one can live with them. The problem arises where costs are needlessly increased by regulation which is in turn compounded by changes to the law relating to holding a pension pot. Of late there have been quite a lot of these. And more are on the way. It is the sheer uncertainty that these generate which cause the judicious saver to wonder whether he should have nothing to do with pension pots.

I am not sure. I read an article by Neil Collins, formerly DTel City editor, some months ago where he commented that it would probably be best to turn to ISAs and have nothing to do with a fresh pension pot accrual programme. This of course entails foregoing income tax relief on building up the fund and waiting years before drawing on tax free proceeds from the ISA. That looks pretty drastic to me but it does offer certainty of a sort.

Please note that I have deployed the term “pension pot”. This is to get round the problem that, whereas my generation thinks of a pension as an annuity which is already set up and drawn upon, many prospective pensioners think of the sum set aside in the fund which is ultimately to provide the pension as their pension. The result is a glorious muddle.

However, notwithstanding my being all too well aware of the lack of clarity in language deployed to describe pension pot problems, I turned to Charles Stanley’s latest Stockmarket Bulletin and an article therein on the “Pension lifetime allowance changes as of 6th April”. After ten minutes, having decided that the article was/is so badly written as to be incomprehensible, I gave up. This is extremely tiresome.

At a guess, this pointless drivel is generated by marketing men following the CS mantra that CS is nowadays all about “wealth management”. Actually, CS nowadays is generally all about CS syphoning off fees arising from funds which they market. Put another way, CS is actually about wealth dissipation. Only, CS do not tell you that.


I bought another 42,000 Molins (MLIN), at 68p, yesterday. I am not sure that this was particularly wise. Molins is capitalised at £14m whereas net tangible asset value is £20m.

The accounts yesterday published are fairly muddling. There are three different profit reports. The first is the underlying profit from continuing operations, £3.8m. The second is the statutory profit of £2m whilst the loss for the year is £4.1m.

This commentary is adorned with the advice that the underlying earnings per share from continuing operations was 15.1p whilst the basic loss was 20.9p.

It takes a while to go through the profit and loss account and balance sheet to understand all this. And, actually, I am not sure even now that I do. Clarifications welcomed.

The board declare that the final dividend will be cut by 1.5p (leaving 4p in total – not a bad yield) since they think that the commercial outlook is uncertain (that’s Molins for you) and that there is the possibility of an acquisition. It cannot be a large acquisition since the dividend saving of c. 20m times 1.5p barely pays for lunch. All in all I reckon the dividend cut means very little.

What is more interesting is the note on pension schemes (yup, it’s them again). Here it is disclosed that at the end of 2015 the value of the fund was £346.9m as against the actuarily computed liability of £336.3m. That surplus of £10.6m would be subject to tax if it could be credited to profit and loss account. But, even so, it’s a lot in relation to Molins and a remarkable improvement upon figures arrived at in 2012.

Molins is really a bet on the pension fund. This is unusual.


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