FY2023 Gross Capitalisation Rate
Quote:
Originally Posted by
winner69
Guidance full year cash dividend 7.9 cents
NO pay rise this year for shareholders
Don't they know there's a cost of living crisis
Quote:
Originally Posted by
Snoopy
No problem Winner. Just wait for the share price to go down. That means the yield will go up. There is your 'pay rise' ;-P
Quote:
Originally Posted by
winner69
NPBT (and before property re(de?)valuations) $35.247m
AGM today and share price down to $1.35. No. of shares on issue at EOFY 367.503m => Current market Value $1.35 x 367.503m = $496m
Gross Capitalisation Rate = Net Operating Income / Current Market Value = $35.247m/$496m = 7.1%
Winner got his pay rise. All good?
SNOOPY
The theory of share buybacks, with IPL as an example: Part 1
Quote:
Originally Posted by
Snoopy
The overall strategy of the last few months looks to have been to 'cancel existing shareholder capital at a high price', while 'planning to bring in new shareholder capital at a low price'. (more shares now need to be created at a lower price to reverse the lesser number of earlier higher priced shares cancelled). That sounds like a 'net eps dilution' exercise to me. 'Sound capital management' by the board?
Perhaps my comment above was a little cynical. I doubt if the board (or anyone) could have reasonably foreseen that interest rates in NZ would rise so far so fast.
Quote:
Originally Posted by
Aaron
It makes you wonder why companies do not just pay higher dividends rather than buying back shares. Tax free capital gains from higher value shares perhaps or stock price manipulation. I think share buybacks were made illegal a long time ago and brought back with the Companies Act 1993 (possibly fake news have not DMOResearch) suspect they may be again banned again before too long. I do not see the benefit of buybacks other than pumping up stock prices and management performance fees. Perhaps someone could enlighten me as to the benefits of share buybacks.
The fundamental theory behind share buybacks, the process where shares are bought back and cancelled, is that, -with less shares on issue-, earnings per share will increase - even if overall earnings for the company remain flat. The negative part of a 'share buyback plan' is that, in order to do a buyback, you have to spend 'spare' cash. Spare cash could come from profits not paid out as dividends. Or it could come from 'borrowed money', if debt levels are judged to be sub-optimally low.
So why would having any debt at all be better? If you have a company which earns a 'high return on assets', then it can make sense to minimise (to a point) the share equity of owners and maxmise the bank debt to finance those company assets. As long as the company are earning above 'bank borrowing rates', that means any returns you earn by using the bank's capital, above bank borrowing rates, are able to be distributed to shareholders. And the less 'shareholder capital' that shareholders have invested in the business, that means all of that excess earnings that come from using bank borrowings can be distributed over that smaller pool of shareholder capital. The smaller the pool of share capital, the greater the amount of excess earnings derived from the borrowed bank capital that can be distributed 'per share' to the equity holders.
This is how a company optimises 'capital efficiency' to favour the shareholder. However, to make this work, a company must have a 'good business model' to start with. The key factor in a 'good business model' is to make sure the 'return on shareholder assets' is well above the borrowing rate that you have negotiated with your banking syndicate. OK so there is the reasoning why you might want to do a share buyback. If you have read and understood the above, you have probably already figured out why a share buyback strategy might be upset by rising bank interest rates. So how does all this affect IPL? For that you will have to read 'Part 2'.
SNOOPY