The results were good - what I expected with WA doing well and the eastern states improving (mainly adjusting costs to lower volumes). To quote:
“In Australia, our east coast operations have experienced the effects of the high $A on the domestic manufacturers while on the west coast we have seen the positive impacts of the mining industry.”
“Our strong second half performance has been underpinned by the strength of our Western Australian operation and the stabilisation of our east coast contract distribution business.”
A fully franked dividend of 11 cents is worth 15.7c if franking credits are considered, and at an SP of about $1.50, this is a good yield - about 10.5%. This suffices to put a floor under the SP, which protects against the downside. A second level of protection is that net tangible assets are $1.72 per share.
With ROE on the low side, KSC is not going to shoot the lights out, but I am happy to keep it in my SMSF portfolio to churn out the income that it needs to pay my pension.
KSC Price at posting:
$1.50 Sentiment: Hold Disclosure: Held
