Ann: Preliminary Final Report, page-22

"My suggestion was based on div payment of 4c after payout debt... wrong?"

Yep, quite wrong.

Because:

1. even if the FY2019 dividend ends up being 4cps (which it won't for a number of reasons which, in the interests of brevity, won't be discussed now),

and

2. even if the stock gets priced on a trailing dividend yield of 4% (which is even lower than the current trailing yield of 4.2%)...

...that would place the stock at a price of $1.00 per share, equivalent to a market cap of $118m, which is a very long way off your $200m figure.

And the scenario of the market capitalising that highly unlikely 4cps dividend at a 4% yield is so improbable that it doesn't bear any serious contemplating.


Instead, I think that, at the very best, total DPS for FY2019 will come in at 3.5cps, which would still be a whopping 40% increase in FY2018's total DPS. Given FY2019 EPS growth could come in between 20% and 25% higher, even a 3.5c DPS would require a lift in the dividend payout ratio to an all-time high of 60%, from last year's 53% (which, itself, was also a record at the time).

DPS of 4c would require a 70% payout ratio.
Which simply ain't going to happen, because that would leave insufficient surplus capital to invest in the business to support long-term, future growth.


So, for a quite comprehensive set of reasons, your $200m market cap expectation is so way off the mark, that it borders on the ludicrous.