Originally Posted by
xafalcon
And with respect to you Snoopy.
You are mixing underlying value with market value
Underlying value is the theory behind a buy-back being better, and I don't dispute the theory. The maths works out every time
Market value is what someone is prepared to pay for a share at a point in time. It is not a 1:1 relationship with underlying value. The two can be and often are totally disconnected. This is a fact that is demonstrated by the market in every transaction
Now you can always sell your share(s) at market value and spend the money on whatever you want. But you can't always sell your share(s) at their underlying value. This is also a fact that cannot be disputed
Through the buy-back the market value of CEN decreased from 500 to 450 while the underlying value has increased.
So was the buy-back a success? Hard to say definitively, but it feels pretty poor to me
SP has decreased by approx. 10% and a 13.6cps special dividend was not dished out
Market forces have totally swamped the buy-back effect. Same thing happened with MRP.
This is why I would take the special dividend every time. In this example 13.6cps is 13.6cps, it comes in a cheque that can be spent on whatever whenever, and isn't subject to unpredictable market forces
The inconsequential increase in dividends (based on interim & final F15) is 26cps x 3.4% = 0.88cps extra annual dividend. Under $100 on a hypothetical $50k investment held for a year. Peanuts (a pun, just for you Snoopy) :)