HGO Position, page-52

Here is my calculation of the value of the value of our franking credit balance (on the basis that it would be used to provide a fully franked dividend(s) to all shareholders.

Number of Shares on Issue: approx 568M (maybe 590M if all performance rights vest)

Franking Credit balance: $21.3M (note 24 to accounts)

Franking Credit balance (FCB) per share: 3.75cps

Dividend which can be fully franked (at 30% tax rate) using this FCB: 8.75cps

Cash required by company to pay this dividend: $49.7M

Grossed-up value of this dividend to shareholders: 12.5 cps

So to be able to pay this dividend to all shareholders and so use and exhaust the valuable (to shareholders) franking credit balance, HGO needs to have both $49.7M in cash plus the ability to fund its ongoing business.

Note that all profits over the next two years (at least) will not incur tax as HGO has $223M of accumulated losses to use (note 24).

It is going to be interesting to see what means and timing that directors can find to distribute this to shareholders - but for me fully franked divs to all holders is fairest, and asap is the correct timing.