SKE half yearly, page-50

A second half dividend of 9.5c is far from a given because that assumes NPAT for the period will be roughly the same as the pcp. Whilst a nice thought I do think the reality is that there is no chance whatsoever.

The resource sector is still reducing their contract labour force and whilst that probably had a minimal effect on the first half, a far greater impact will hit SKE in the second. To what degree we will find out in time. What concerns me most is the fact SKE did not provide any forward guidance in terms of NPAT for second half.

Taking a pessimistic assessment, if they cut the second half to 4c that would give a current full year of 11.5c or about 8.2%. However, looking forward to 2015/2016, reduce the first half to 3.5c and leave second half at 4c, you end up with 7.5c or 5.5%. One cannot just look at this year, rather you need to look beyond 2014/2015 as that is the the fund managers do.

Put another way, if the prospects are for a full year dividend of 17c, and the same going forward then professional investors (funds etc) would be all over SKE like a rash