Contact Energy - CEN Chart

[Harvey Specter]

Wow - I wonder how many sold out based on the change in plans. Will it gap up?

Opened at $6.30 so up 13% and climbing. Where will it be at the end of the day?

[GoldenStag]

I just danced a jig in my office. My coworkers (who aren't investment minded) were somewhat bemused.

[RTM]

The cynical side of me really wonders why the company has publicly gone through this exercise.
I am with you Golden Stag. Pretty happy with the announcement. But was it all necessary ?

[Harvey Specter]

Well the price is holding up with over $10m traded. I would do a happy dance but it is only a small holding - it has been underperforming the market for some time but it does provide a constant dividend flow, soon to get much bigger.

[Jim]

Well the price is holding up with over $10m traded. I would do a happy dance but it is only a small holding - it has been underperforming the market for some time but it does provide a constant dividend flow, soon to get much bigger.

11 cents dividend and 50 cents special dividend, Wow !!

[Toasty]

CEN caught in the downwash from the Genesis profit downgrade GoldenStag. Not really justified IMO, and it has bounced strongly on the intraday trading since your post. Trading at $5.61 as I write this! But as you say, that yield of 5.9% (long term average) with the possibility of growth from a geothermal investment in Indonesia, or a capital return (or a bit of both?) to top that return up makes an attractive investment case.

I managed to buy a small parcel today at $5.50 to add to my holding. That was based on the gut feeling that investors wouldn't let it slip below $5.50, a feeling that has so far proved correct. Average price paid overall is now $4.81, with a steady stream of decent dividends to add to my return over the years. My original holding was bought at float time (1998)! I have added to that since both through buying more and the dividend reinvestment scheme as funds permitted. Have never sold any. Owning CEN shares today isn't a get rich quick scheme. But it has proved a great core portfolio investment.

SNOOPY

PS Share price closed the day at $5.68! I sure nailed the timing on this purchase today.

I have to admire your timing Snoopy. Well done.

[BIRMANBOY]

Timing is transitory ....belief is long term and at $4.81 the beagle deserves a cuddle...good work Snoopy.

I have to admire your timing Snoopy. Well done.

[Snoopy]

11 cents dividend and 50 cents special dividend, Wow !!

Here is the bit of the announcement that confused me:

"As the company has accumulated a significant balance of imputation credits from capital raisings over recent years, the company has determined to return $367m (50cps) to shareholders through a fully imputed special dividend to be paid on 23rd June."

I thought imputation credits reflected tax already paid by the company on behalf of shareholders. How does raising new capital create imputation credits, when the new capital is not money earned by the business in operations? Can any accountants out there explain?

SNOOPY

PS I am pleased to see Goldenstag back in the black too!

[fish]

I have held CEN since its listing and have never been asked to contribute capital.
I wonder if it is some accountancy thing-appreciation of value of assets which they have paid tax on

[Harvey Specter]

I thought imputation credits reflected tax already paid by the company on behalf of shareholders. How does raising new capital create imputation credits, when the new capital is not money earned by the business in operations? Can any accountants out there explain?

You dont receive IC from capital raising. Excess IC are generated when your taxable profit is greater than the amount of dividends distributed (gross simplification). My guess is their tax manager didn't review that press release and will now be the ridicule of the profession.