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I see we are having another day of low volumes. I presume everyone is keeping tight hold of their shares as they should in my view. The low number of shares means that you would not need a large amount of funds to pay dividends. If my maths is right a p a share dividend would come up to £650k.
I know a lot would disagree Stokey but i definitely don't want to see any dividend from INFA for quite a while !
There are pros and cons of a company paying dividends. Pros are it makes a stock more attractive to new potential investors to buy. It encourages existing holders to remain loyal. It can encourage investment and pension companies to have a stock in their portfolios, etc.
Disadvantages can include, it slows growth opportunities for a company to reinvest if they're paying profits out as dividends.
JW has big ambitions for INFA and these will obviously require funding. I'd prefer to have any profits accumulate to fund further growth at the minute rather than the need for further borrowing. We've previously seen borrowing with the likes of Riverfort, and although this was necessary at the time, borrowing (at sometimes not the most attractive rates) can have a negative impact on a share price.
We're maybe jumping the gun a little too talking about dividends, although it's good to look ahead. We need INFA to be profitable first before the discussion of dividends is a possibility.
First off thanks for providing that insight dawski. Stokey, thanks for your continued contributions to the board too. Can I ask... You have mentioned dividends a few times. Can you explain your rationale behind it again please? I think I'd much rather infa retained moneys for the time being as a buffer. Particularly as it would assist in securing larger contracts - (companies want to see we have the money to see out the works). Out of interest, At what point are you anticipating dividends to be announced? I'd love to get dividends some day but I think a couple of years of income building would put me at ease first
Looks like u beat me to it TTNY haha
It was only by a few minutes Jab, lol.
The term makes me cringe the way it's overused these days, but, we're singing from the same hymn sheet Jabido.
For me the first priority should be getting the hell out of the AIM exchange.
Jabido In relation to your 11.39 post I do not think we are much disagreement. My view is that up to a third of any profits could be used for diviidends with the rest being used to grow the company. On the question of timiing from recollection the retained deficit on the balance sheet is circa £29m. Before any dividend can be paid this would need to be cleared. The two ways thatcan be done is by either cancelling out the Share Premium Account if there is enough in it. The alternative and my prefernce is by the accumulation of retained earnings. From the work that has been going on at H &W I would anticipate that INFA may reach the situation where there are retained earnings by the end of this financial year (31 July 2021). If that proves to be the case then dividends can lawfully be paid from then. I think when dividends will start being paid from depends on the shareholdings of the directors.
I think estimating a penny per share dividend is about right given AIM stocks yield around 1.5%, FTSE 250 2.5% and FTSE 100, 4%. As for the merits, a dividend should only be considered for payment if the current revenue is expected to be maintained or increase. Its always a sign of the managements confidence in the future prospects. I concur with the general consensus on here that self funded growth is the key at this point and with potentially significant capital spending requirements on the horizon (fingers crossed)...paying a dividend would not be seen as foolhardy.
As for light volume, I see our large seller has been in evidence again. It remains to be seen if he is content to sell in days of significant demand or, if we have several low volume days, he pushes on and forces the share price lower. I notice from the charts that we are in a slightly ascending wedge formation with significant support at 36 and resistance at 42. For now, with the absence of solid financial information, we should stay within that range. A close below (36) or above (42) would induce me to act. Reducing on the former and adding on the latter.
Sorry...at the end of my piece on dividends, it should read...would be seen as foolhardy
Thanks for your reply Stokey. It's an interesting last point you make and to me would demonstrate the type of bod we have. Like others said, I think JW is here to create a monster of a legacy, and not for short term money making off our backs. Will be very interesting to see at what point dividends are declared as to answer that question. Re Instagram, I refuse to use it. Maybe coz I'm getting on a bit, so il stick to twitter and hope others too will share any insights from it. Finally, I'm starting to get quite excited about the wind turbine potential having had a couple of days to ponder. Good luck all and let's hope for a juicy rns at 7am!