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$2.43 erm power limited

2016 Guidance Affirmed, page-182

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joewolf

4,503 Posts.

174

01/02/17

11:56

Post #: 22283393
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Originally posted by FSW ↑

Totally agreed on the LGC position - anybody would rather pay a penalty at $65 than pay the market at $90 - plainly simple.

Not looking to short - agree with you that the time has passed. Instead I am trying to ascertain whether or not the dividend can be sustained over more than one or two periods. Analysis shows they have the capacity to pay the dividend from cash reserves - they did after all raise capital for the failed Macquarie bid - but cash reserves are not going to being replenished from operating earnings while the operating margin is sub 2%. So the crux of it is - can they build a picture that shows a meaningful and sustainable improvement to the operating margin to see it back where it was five years ago at greater than 5% as that will drive a sustainable and growing dividend. If they can't drive up the operating margin they should just return the cash too shareholders...

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They also free p around $60 million of cash held to cover supply with the sunset power deal over 3 years ... I don't think they will hold the dividend rather that they will try to give you around 10c with the franking ... So I am expecting 6 to 7c stable dividends.

EPW Price at posting: $1.18 Sentiment: None Disclosure: Held
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