OCA - Oceania Group - retirement villages

[winner69]

I don't know but I have mused about that at quite some length. If they paid a 2.6 cent final divvy like last year it would cost them on the face of it just on $16m, less whatever amount of shareholders have signed up for shares in lieu of dividend at the 2.5% discount, (last year ~ $2.7m), so about $13.3m net shall we say.

Operationally from the Macquarie presentation they appear to be tracking fine from a profitability perspective and they have more than $100m headroom with their financial resources so I would say on the balance of probabilities its highly likely, (but not certain), they will declare a normal dividend when they report their full year result in just on two months time in late July.

I will probably sign up for the shares in lieu of dividend program.

Bit stupid OCA (and others) paying unimputed divies ..only winner is taxman

Neighbour was under impression that if he took shares instead of cash he didn’t have to pay tax on the divie ..some people shouldn’t own shares

Even when he saw on the statement that for every $1000 of divie he only got $670 of shares he didn’t quite get it.

[Cyclical]

Neighbour was under impression that if he took shares instead of cash he didn’t have to pay tax on the divie ..some people shouldn’t own shares

Even when he saw on the statement that for every $1000 of divie he only got $670 of shares he didn’t quite get it.

Mind you, he'd be the same kind of person that would have put 10% as his tax rate on his Kiwisaver and had the last laugh. Sometimes it pays not to be too clever (or honest).

DISC: HOLD (or am I?)

[dibble]

..only winner is taxman

Huh? how does that work? IRD only get one slice from the profit, either from the company (then we get a credit or debit depending on your angle for tax already paid to avoid double payment) or from us/individuals if the company hasnt paid tax already.... have I got that all pete tong?

[Beagle]

Bit stupid OCA (and others) paying unimputed divies ..only winner is taxman

Neighbour was under impression that if he took shares instead of cash he didn’t have to pay tax on the divie ..some people shouldn’t own shares

Even when he saw on the statement that for every $1000 of divie he only got $670 of shares he didn’t quite get it.

Some people need the income.

[winner69]

Some people need the income.

Could always sell a few every now and again.

But if the likes of Oceania pay divies the taxman is at least getting a decent chunk of their profits (with shareholders paying it). As a taxpayer I say thank you but as a shareholder I say it’s dumb.

[Baa_Baa]

Some people need the income.

Some people don’t care, just enjoying the free shares on drip. Compound interest, the eight wonder of the world

[Beagle]

I presume that was a question. Yes they do.

Some people don’t care, just enjoying the free shares on drip. Compound interest, the eight wonder of the world

Thanks, You're on to it

[Scrunch]

Some people don’t care, just enjoying the free shares on drip. Compound interest, the eight wonder of the world

Compounding interest is great, but its benefit is neutralised a lot if there is leakage to the taxman. This leakage is minimal when dividends are fully imputated, but is pretty significant when there are no imputation credits and a significant dividend is paid. Overseas shareholders may distort the calculation a bit, but if all shareholders were on a 33% marginal tax rate, a full 2% of OCA's value is being gifted to the tax man each year. This choice to give away 2% of the company to the tax man each year could be part of why OCA isn't trading closer to, or above NTA. Sorry - if you had a discretionary expense lowering your surplus by $10m/yr wouldn't you look to address it?

A better alternative would be for OCA not to pay a dividend but buy-back 6% of its shares each year. This should give shareholders an additional 6%/yr tax-free capital gain rather than the 4% they get from receiving the dividend as cash. If someone wants the cash, they can sell a small proportion of their shares each year. Share buybacks are very common overseas, particularly in countries like america where imputation credits don't exist (hence the low dividend payments over there). The problem is educating some of the existing shareholder base that there is an alternative.

[dibble]

Well yeah if no dividend at all is being suggested and none is ever expected and the sharebuyer knew this then the share must have purchased purely with the intent of capital gain and, therefore technically (I think?? intent being key?), any gain ought be taxable. Perhaps the suggestion is thus that companies allow us to flaunt the weak policing of this rather grey legislation.

[winner69]

Salt possibly taking a breather until the the next wave of selling

Salt still selling ...lot more to go

Remember what they think of this sector ....net short