ASH and the Federal Election

The surprise win by the Liberals has removed another potential cap around the ASH share price. The Labor party wanted a review of the labour hire sector and to install a new regulator. Although it was unclear what this would have meant for ASH, this risk has now disappeared. Although the s/p may drift until the FY results are announced, I strongly believe we should be looking at a FY divvy of about 2.7c fully franked, and a cash balance of about $8m or more. Accordingly, with the class action effectively behind them, ASH is in a fantastic position to either make an acquisition, or start returning some of the surplus capital to shareholders. Based on my moderately conservative base case, they could pay a 2.7c FF divvy, and a special dividend of 1c per share fully franked, and still have several million of cash on hand to fund seasonal working capital. I know mgt are focused on doing an acquisition (and a good acquisition would be a fantastic result for shareholders), they have been actively looking for 2 years, cash is banking up and the balance sheet is likely strong enough to do both.