conserving cash?, page-2

PP,

I was just about to post something on the same topic.

Let's have a look at the evidence:

- FSA, with support from their financiers, pays a dividend and starts a buyback. The Directors clearly believed that FSA was trading well under its intrinsic worth, under its NTA, and that they were confident FSA would continue to generate strong cashflow. As such, a buyback could be done with some of the surplus cashflow.

- FSA begin buying at regular daily amounts. They were happy to buy on the market at prices above the current prices. 28.0, 28.5, 29.0...

- The buyback then stopped in mid-December, and has not restarted. There has been no announcement from FSA about any known material change to trading conditions or expected revenue. So, that appears not to be the reason. There has been no announcement that might preclude the company from buying on the market immediately beforehand. Other possibilities include holidays (it seems not, given the pause in the buyback appears to have gone on too long).

So, what are we to think of this cessation in the buyback? Any ideas anyone?

The only other thing I can think of is having a buyback up your sleeve for defensive reasons. Sometimes takeover targets announce buybacks so they have the ability to quickly get their share price up if it looks like a hostile and low-ball offer is coming. Could one of the large financial institutions be looking at FSA for their cheap earnings and dominant position in the debt services segment? Maybe. Maybe not.

I am open to any other information or suggestions. But it does seem odd they they start a buyback, and then stop so soon.

Yaq