A payout is definitely not a given but if one occurs the debate will soon swing to what proportion should be returned to the shareholders vs what should be kept by POH to further the objectives of the company. Bear in mind that POH currently has a MC of around $40M. At the last half yearly report POH had net assets of $6M, accumulated losses of $257M and looks to be making a loss of around $3.6M pa. Expenses (annualised) look to be around $6M. Now suppose that the payout amount was $US 150M (just by way of an example). Under the proposed split, shareholders would receive 4.75 cps and POH would retain $AUD 135M. The question is, how would management see POH using this money or indeed could they use that money in any reasonable timeframe. If not, then it should be returned to the shareholders. I know others would also point out that POH management has not had a great track record of using the capital they have to create shareholder wealth, so I would definitely support a higher proportion being returned to the shareholders in this example.
POH Price at posting:
2.6¢ Sentiment: Hold Disclosure: Held
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