upgrading cix to strong buy, page-13

Kit,

are you sure about your view on those franking credits and tax losses? Im no expert on this but the following is my understanding.

I thought the change in dividend rules (where they don't have to come out of profits) in the last year would enable them to pay out excess capital in the form of a franked dividend. Search google on "changes to dividend payout rules" for more info.

On the tax losses. As long as they satisfy the continuity of business test then the change of ownership doesn't matter. The limiting factor in the value of the tax losses is that if CIX was taken over by a company 10 times its size then then they would only be able to apply 10% of those losses each year. So in effect the tax losses are of more value to a smaller company. Note: look at the current fight over WAB if you want to see the value of tax losses. I think these rules have also changed in the last 10 or 15 years.

I see CIX is back into their share buyback.

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