VPC is in a period of wind down. Its dividend on a “headline” basis is one of the strongest on offer at 16.84% per annum but is that good value for money? Is it “real” and sustainable? And should existing shareholders hold on, average down, or exit?

These have a repayment schedule which is shown below.

In the next 12 months over 40% of the loans will settle. The chart below is net of debt (£24m) plus about £45m of paydowns up to Q2 25. Obviously the 16.84% dividend will reduce but it’s likely to continue for another 4 periods at 2p a quarter – so an 8p a share return. After that (Q3 2025) it probably drops to 1p a quarter for another year and after Q3 2026 perhaps drops to 0.5p a quarter until the end of 2028.

If that’s the case then that’s 16p of dividends over 4 years. In 12 months time alone deducting 8p from today’s 48p buy price is equivalent to buying at a discount to NAV of 45.8%

Remember too the 73.82p estimated NAV is net of a 2p per share dividend in Q1 as well as a 4.26p capital return of B shares in April 2024. In other words we are on an 80.08p NAV as at 31/12/23 less distributions in 2024. Less a 1% YTD loss.

The Oak bloke