Leica closes record year, pays dividend

[mjh]

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as for paying the investors, apple pays no dividends and the performance of the stock has rewarded its shareholders mightily.

As an Apple shareholder you may delight in watching the price of your stock grow and grow, but this does nothing to pay the rent or the gas bill unless you sell some of your stock. What if you don’t want to let go of your shares in the company and still don’t become a homeless and starving millionaire?

[sblitz]

apple shareholders sell stock along the way -- and cap gains taxes are lower than income taxes.it is one reason why reports of insiders buying is much more informative than insiders selling. people always need a reason to raise cash -- like to buy a noctilux lens.

 

perhaps leica shares are not liquid enough. i once looked it up and they appear to trade on appointment. perhaps the firm can do a secondary offering to forum members. it might be nice to get a nickel back on every item leica sells.

[bybrett]

I learn a lot on this forum.

[mjh]

apple shareholders sell stock along the way -- and cap gains taxes are lower than income taxes.it is one reason why reports of insiders buying is much more informative than insiders selling. people always need a reason to raise cash -- like to buy a noctilux lens.

You are aware of the fact that the vast majority of Leica shares are owned by ACM Projektentwicklung GmbH? There isn’t a lot of trading in Leica shares and if ACM Projektentwicklung GmbH had had their way, there would be none.

[stuny]

I keep Leica's symbol on my securities monitor list on my ThomsonReuters terminal and can't remember the last time I saw any movement in it.

[jaapv]

You are aware of the fact that the vast majority of Leica shares are owned by ACM Projektentwicklung GmbH? There isn’t a lot of trading in Leica shares and if ACM Projektentwicklung GmbH had had their way, there would be none.

Which brings us to another point. ACM is heavily involved in the opto-mechanical industry,including companies closely related to Leica. Which means that the proceeds of these dividends may well be invested in a way that benefits Leica.

[IkarusJohn]

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I learn a lot on this forum.

 

Not so much on this thread, I'd guess.

 

I love the logic - "Leica abandons R camera users", notwithstanding that the R series seems to have never made a return for the company. It would appear that they held onto this system for too long.

 

"Leica declares a dividend - it's doomed" The only reason it has returned to profitability would appear to be that it ditched the R system and developed the digital M (and I'm sure a few other things along the way).

 

The fact that the company declares a dividend after so long on the verge of bankruptcy doesn't automatically mean it is over-capitalised. It simply means that it made a profit, from that profit, it applied some of the funds to expansion, R&D and other plans for the future, and then it paid the balance of that profit to the owners. That's who the profit ultimately belongs to, right? The owners? To understand the full rationale of the declared dividend, you'd need to see the company balance sheet, and review its dividend policy (not something they've used in a while).

 

The alternative is the surplus belongs to the wider community of stakeholders - employees, customers, suppliers, bankers, and then owners. So if a company is successful, who should get the surplus? Some here seem to think surpluses should be dumped into dead end products like the R-Series ...

 

Declaring a dividend should be a good thing, as it should be an indication of a company in good health.

 

Cheers

John

[adan]

Just for the record - Leica is effectively a privately-held company.

 

98%+ of the company is owned by Dr. Kaufmann's holding company (ACM-whatever-mjh-said; which bought out Hermes' 33% stake about 10 years ago and various other smaller shares along the way). Leica only went public in the first place in the mid-1990's (with - natürlich - a special edition M6 commemorating the IPO that came with one share of the stock ("Ein Stuck" - Leica M6 Ein Stuck ))

 

Several years ago Leica tried to force a repurchase of the remaining handful of outstanding shares (but so far as I know, NOT the Ein Stuck cameras themselves ) in order to go totally private, but the move was blocked in the German courts. Which is nice for observers like us on this thread, since it means Leica still has to issue "investor-grade" quarterly/annual reports - even in the absence of significant room for any outsiders to actually invest.

 

It's also good for the company in the long term, because Kaufmann doesn't have to pursue a short-sighted "what did the stock price do today?" development strategy to keep fund managers (who may care nothing for the products) happy.

 

The "growth stock" model works for some companies - but not all. And it leads to things like the "dot.com" bubble, where people were buying shares in companies with no net income at all, based solely on being able to flip the shares to someone else at a higher price before anyone noticed the emperor wasn't wearing any clothes (has no income and no business model except "hope").

[dfarkas]

Just for the record - Leica is effectively a privately-held company.

 

98%+ of the company is owned by Dr. Kaufmann's holding company (ACM-whatever-mjh-said; which bought out Hermes' 33% stake about 10 years ago and various other smaller shares along the way). Leica only went public in the first place in the mid-1990's (with - natürlich - a special edition M6 commemorating the IPO that came with one share of the stock ("Ein Stuck" - Leica M6 Ein Stuck ))

 

Several years ago Leica tried to force a repurchase of the remaining handful of outstanding shares (but so far as I know, NOT the Ein Stuck cameras themselves ) in order to go totally private, but the move was blocked in the German courts. Which is nice for observers like us on this thread, since it means Leica still has to issue "investor-grade" quarterly/annual reports - even in the absence of significant room for any outsiders to actually invest.

 

It's also good for the company in the long term, because Kaufmann doesn't have to pursue a short-sighted "what did the stock price do today?" development strategy to keep fund managers (who may care nothing for the products) happy.

 

The "growth stock" model works for some companies - but not all. And it leads to things like the "dot.com" bubble, where people were buying shares in companies with no net income at all, based solely on being able to flip the shares to someone else at a higher price before anyone noticed the emperor wasn't wearing any clothes (has no income and no business model except "hope").

 

What Andy said, and....

 

Kaufmann's move to acquire all the shares and take the company private is probably one of the reasons why Leica has been so successful these past two years. During the depths of the global economic crisis, when other companies were laying off employees and slashing R&D budgets in an effort to maintain shareholder value and stave off negative EPS numbers, Leica was increasing its workforce by 10% and investing heavily in projects like the M9 and the S System. They spent about 8-10 million Euro on the M9 and 30-40 million Euro on the S System (including the first 4 lenses). Add in the new Ultravid HD binoculars, new spotting scopes, the X1, and the entire line of Leica Cine lenses and you come up with very hefty R&D expenditures amidst a very dismal global economic forecast. During that time, 98.5% of the shares were owned by ACM, Kaufmann's holding company, so really, the only shareholder he needed to satisfy was himself. Remembering a talk he gave back in 2008 to the LHSA, he said, "We don't need to make money next year, or the year after that, or even the year after that. We have our sights set on long-term profitability and growth in five years, in ten years. We don't just want to improve a little. We want to double, or even triple our current sales in this time frame."

 

I'd say that his commitment and fortitude in staying true to his vision, even amongst difficult times, paid dividends. Literally.

 

David

[Steve Ash]

I have deep respect for what Dr. Kaufmann did the last years. He took a lot of risk and did not go the easy way. As I understand this dividends does not turn his balance sheet for investing into Leica positive. So any critics are misplaced at this point of time.

 

Regards,

Steve

[luigi bertolotti]

The decision to pay a dividend could even mean some new ideas in Dr.Kaufmann's mind... I do not know if he's still pursuing the complete privatization of the Company, but, for sure, is illogical to have 98,5% of a Company belonging to one shareholder and the rest tehorically "floating" in the market... a situation that cannot endure... both for the main shareholder and the market's regulators : with this kind of P&L figures, and the payment of a (conservative) dividend, Leica can be still a stock that could be welcome in the market... maybe, to rebuild a publicly traded mass of shares (say, 25-30%... I don't know German rules about... in Italy would be 25%) through a public offer could be one of the options in Dr. Kaufmann's mind.

[Xmas]

Luckily you all make better pictures and other people understand business.

this would be better without smiley...

 

But it looks like they invested a lot of money on S that would have been better spent on M development, body and lens development. Reincarnation of a loss leader like the R series is wilful.

 

e.g. Cosina is eating the Dr's cream pudding.

 

Noel

[Peter H]

A dividend isn't a reward, like a gift, or an arbitrary hand-out in return for being nice or well-connected.

 

Its a price you pay for hiring someone else's money. And its a price you pay for being allowed to put that money at risk while you try to put it to good use without losing too much of it.

 

If you're not prepared to pay the right price for something, you know what you get don't you?

[jaapv]

this would be better without smiley...

 

But it looks like they invested a lot of money on S that would have been better spent on M development, body and lens development. Reincarnation of a loss leader like the R series is wilful.

 

e.g. Cosina is eating the Dr's cream pudding.

 

Noel

Err.... Money spent on the S system is money spent on the full range of Leica products. Dr. Kaufmann made it quite clear that the S2 is Leica's technology platform. Are you going to complain when Maestro technology is incorporated in the M10? Or S2 type weathersealing? Where do you thing the amazing creativity of the M lens system comes from? I think it is rather pointless criticizing something we don't have the expertise and/or data to judge, don't you agree?

[SJP]

And what exactly is wrong with the M system?

 

The M lenses are pretty close to what can be achieved without really going over the top re. price, design tolerances etc. The average 10-15 years life cycle of a M lens design is related to that.

 

Maybe they could tinker a bit further with the M9+ body but also there it is hard to concieve any major game changes.

• AF is not desired by most, as is CMOS/live view so what else can the do?
  
• More pixels = waste of breath.
  
• Smile recognition = no way.
  
• Some cosmetic changes (chrome, sapphire etc.) = OK but that is not major R&D.
  

[jaapv]

Well, Stephen, I think they could do a bit on the electronic side. The sensor has no superior successor, so there is maybe not much to be gained there, but more computing power, maybe implement a bit of optional noise reduction, a larger buffer and higher writing speed would be a good thing. That is where the Maestro could come in. And if they were able to implement weather sealing it would be a good marketing point.

[hamey]

It really amazes me how people continually make accusation on how the R system never made any money

 

Well was the Leicaflex a loss, was the SL a loss was the SL-2 a loss was the R3, R4,R4s,R5,R6, R6-2 R7,

R8, plus the DMR and finelly the R9 plus all those wonderful R lenses they produced over the years were a loss.

 

If thats the case, those accountents that Leica employed must have been a bunch of knuckle heads.

Do you really believe that after 40 years Leica did'nt make any money on the the R series.

Strange to continually produce this system for so long, perhaps they really did'nt have to much fate in the M SYSTEM.

 

A while back Leica stated that it could not make a Digital sensor for the M cameras because of the narrow clearances, so all R&D went towards the DMR and the so-called loss making R SYSTEM.

Hassleblad bought out Amacon so no more DMR's, perhaps Hassleblad considered the DMR coupled up with R lenses to good for their liking.

 

Then the unthinkable happened a Sensor was made that could fit the M series.

 

A meeting was convined, we can make more money selling M cameras, those silly buggers will buy

anything as long as we put an M on it, plus it's cheaper to produce then the R camera our profit

margins will be greater.

 

What about the R system.. yes a problem, we don't have enough Cash to develop both, just tell them we

have been loosing money since 1965, treat them like mushrooms, keep them in the dark and feed them

BULLSHIT.

 

Thank goodness I finelly got plucked up from the ground so they no longer can feed me BULLSHIT.

 

 

Ken.

[bill]

It really amazes me how people can carry so much negativity for so long. I wonder if Olympus users are still bemoaning the death of the OM system, Canon users the summary execution of the breechlock mount, and so on.

 

Let it go. Accept the facts. Not liking them doesn't make them bullshit.

 

Regards,

 

Bill

[luigi bertolotti]

It really amazes me how people can carry so much negativity for so long. I wonder if Olympus users are still bemoaning the death of the OM system, Canon users the summary execution of the breechlock mount, and so on.

 

Let it go. Accept the facts. Not liking them doesn't make them bullshit.

 

Regards,

 

Bill

 

Infact, I'm still "negative" with Zeiss which seems no to provide a Digital Back for my Contarex set...

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Hallo,

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[Dan States]

It really amazes me how people continually make accusation on how the R system never made any money

 

Well was the Leicaflex a loss, was the SL a loss was the SL-2 a loss was the R3, R4,R4s,R5,R6, R6-2 R7,

R8, plus the DMR and finelly the R9 plus all those wonderful R lenses they produced over the years were a loss.

 

If thats the case, those accountents that Leica employed must have been a bunch of knuckle heads.

Do you really believe that after 40 years Leica did'nt make any money on the the R series.

Strange to continually produce this system for so long, perhaps they really did'nt have to much fate in the M SYSTEM.

 

A while back Leica stated that it could not make a Digital sensor for the M cameras because of the narrow clearances, so all R&D went towards the DMR and the so-called loss making R SYSTEM.

Hassleblad bought out Amacon so no more DMR's, perhaps Hassleblad considered the DMR coupled up with R lenses to good for their liking.

 

Then the unthinkable happened a Sensor was made that could fit the M series.

 

A meeting was convined, we can make more money selling M cameras, those silly buggers will buy

anything as long as we put an M on it, plus it's cheaper to produce then the R camera our profit

margins will be greater.

 

What about the R system.. yes a problem, we don't have enough Cash to develop both, just tell them we

have been loosing money since 1965, treat them like mushrooms, keep them in the dark and feed them

BULLSHIT.

 

Thank goodness I finelly got plucked up from the ground so they no longer can feed me BULLSHIT.

 

 

Ken.

 

Take a pill...

 

As they clearly stated when they killed the R, they would love to be making R cameras and lenses but realized that their predecessors fiddled around with the R2-9 far to long without coming to grips with auto focus. They can not compete technologically in that market and have said so. In addition the SLR market has become just another portion of the consumer electronics business, with product cycle times that a very small company can not operate in profitably.

 

Regarding profitability over they years...they have managed to slink along since the heydays of the 1950's but have lost money as often as not...only to be run through a series of sales, mergers and stock gambles that nearly ended the company.

 

Focusing on what they can do well is the right strategy.