advice needed, page-16

re: advice needed, smuggler Smuggler
Let me try just once more to explain the rationale of SEN’s share buy back (as I see it)
At the end of Dec SEN had cash and receivables of about $13million – AND NO DEBT.
In such a situation a board could do one of 4 things: (1) leave the cash in the bank yielding, at best 5.5% (2), race out and use the cash to buy “something” for the sake of it (3) have a special “one-off” dividend and/or increase normal dividends or (4) conduct a share buy back.
(1) leaving the cash in the bank attracting 5.5% is not responsible – a Board should be targeting a return on SHF of at least 15%.
(2) To simply buy something for the sake of it would be negligent
(3) A one-off dividend, or increasing the normal dividends is nice for holders, but does little to “add shareholder value” of the company and is short term in nature.
(4) Buy-back’s on the other hand reduce the amount of shares on issue and as such improves the balance sheet and adds long term shareholder value.
You claim “the Boards role is to "improve" or "add" shareholder value”; to my mind this is exactly what they are doing. Any suggestion they are trying to prop up or manipulate the share price is ludicrous.
If SEN were to use up all/most of their spare cash with a one-off special dividend as you suggest, then should a suitable takeover target surface they would need external funding.
Better they use up surplus cash flow through progressively buying back shares. That way they can retain a suitable war chest to buy the right asset as and when the opportunity arises.
Again, SEN are in the enviable position of having a healthy cash flow, lumpy cash/receivables and no debt – very,very few listed companies like that. Actually, one could argue they should create some debt in order to buy say 10% of their shares – that would be aggressive balance sheet management.

Simply my views and welcome any others.