dividend, page-3

Vjind,

I tend to agree with your view on dividend payment. I reckon given:
a.the share price is as low as it is now;
b. despite the negative NPAT in FY2008 due to non-cash impairment charges, its cash earnings was actually strong still;
c. they are disposing VCS exposure to reduce overall risk, asset writedown as economic downturn deteriorates, and also to lower gearing and LVR in anticipation of asset value writedowns.

Obviously the management is doing the right things to preserve value for shareholders in the difficult time, and by doing so rebuilding the confidence of institutional shareholders.

A dividend of 3-4 c will set it apart from other REITs like CNP, CER or others that are suffering from high gearing and the saga with their banks.

The business after the VCS disposals will likely maintain ROE or even improved ROE, and lower debt.

I was also thinking that, given its gearing and low sp, VPG may choose to buy back some of the shares with the cash generated from VCS disposals. That will be a boost to SP as well.