recover from dividend play, page-6

rormon

I do not understand your concern with, and interpretation of the $85mio capital raising back in January/February.

It is natural for companies to raise extra funds to "accelerate the growth of the business and provide balance sheet capacity for future acquisitions"

The fact the issue was increased from $60mio to $85mio, and then still needed to be scaled back, indicates that insto's were very receptive to the new issue.

Such a capital raising is no different to a shopkeeper with one shop wanting to raise funds to buy the building next door in order to facilitate expansion of his business.

Provided the increased business results in a commensurate and increased in NPAT, then the exercise is correct. In the case of CIY, eps in the year to 6/2007 increased about 10% year-on-year, on the increased capital base.

Insofar as paying such a high dividend, CIY has always been seen as a yield play stock. Management has previously flagged they propose to reduce the current payout ratio of 80%-85%.

The company has an excellent track record of increased eps and has only recently re-affirmed their current period forecast for an increase of "at least" 10% on the pcp.