Future Capital Allocations, page-23

Interesting replies. Seems most against the idea of a divvie. One more crack from me.

As mentioned before, I accept the logic of those who are against a divvie. I support its introduction and I figure the different perpsepctives are the result of how VMT is viewed as a company. Anyhow.........

Most seem to agree about with the strategy of consolidation. The comapny attempting to be a 'serious' company. Not a penny dreadful.

I just see the introduction of the div as being complementary to this move. The directors would be demostrating that the are 'sophisticated' enough to adopt a multi-pronged capital management strategy that can simultaneously cope with investing in new opportunites, appropriate debt levels and management, R&D as well as rewarding long-term holders (I can remember our friend Varuka's concerns about the make-up of the board. This board has really hit its straps in recent times).

Many appear to be concerned that the company is in a growth phase and/or in a competitive and developing market space and that now is not the time to intro divvies. Personally I would like to think that this growth and innovative character of the company is not a phase but represents a permanent state that the company embraces and manages forever. If this is the case then sooner or later they will need to deal with competing demands on their capital. Expansion, Innovation, Debt, New Partnerships and shareholder rewards need to be dealt with simultaneously. This co-existence should be viewed as normal. So why not start now?

Mention has been made of 'normalised profit' and some figure this comapny is going to continue to release profits that 'would be great except for.........'. Well, I just reckon / hope that the recent balance sheet purge is the last for the foreseeable future and if it is the comapny's so called profits and cash flows will undergo a quantified convergence.

Finally, in relation to expansion, I would imagine that the comapny's growth is going to continue to be less incremental and more quantum like. In the medium term (say 3 years), I would have thought that this is going to be best facilitated by a takeover or via several significant JVs. Cashflow won't be large enough to support the likely opportunities that the company is likely to experience. So again, why not allocate some of the capital (cash) to dividends? As mentioned above, I would have thought that a DRP would mitigate that anyway.

That said, I understand why some people would have different views to me but it is an interesting conversation.

Cheers