Divi, policy, is it the best29 Sep 2014 13:29
for shareholder value? I'm no fan of scrip issue. In essence, if everyone took the scrip, the no.of shares in circulation would increase by 10% ( annualised), thus devaluing the eps by 10%. Two alternatives for me, would be:
1) Dividend re-investment scheme. No share dilution,
2) Share buy-back scheme. EPS was 12p/s. Cash divi is 2p/s. Co. states cash rich, and can accommodate capex from own cash. If 2p/s ( £1.56M), was used to BB own shares, at todays price, 3M shares could be bought and cancelled. This would have the effect of increasing the EPS by 4% with no growth in PBT.
As stated, not a fan of scrip, and is normally reserved for co's with cash flow problems. The doom mongers on Chinese AIM co's will pick up on this.
Plenty of profit taking at 55p this am, expected, since some had bought in at below 40p. Barring catastrophes, the FYR should give, again a 4p+ divi, = 8% pa, which ought to give sp of c63p. Will it get there this year?, probably not. PI's will wait a few weeks before ex-dividend date, and start buying then.
On a more positive note, it was good for the CEO to make a statement re: the bad press other Chinese AIM co's have had, and citing the differences between them and CAMK.
Winter trading for CAMK is better than H1, and lets hope PI's see the on-going potential of this growth stock. An aggressive buy-back scheme by BOD's will see this share £1 in 2 years. All in MHO of course. GL