Hi mate. I understand what you are saying. But don't agree on everything. I agree the management influence is fantastic. It is why the company is so well run. I am also a big fan of lyl they have a history of cash generation which proves they are a business throwing off cash. And I agree they have paid dividends. However they have 50m to 100m cash sitting in their bank accounts. So they have not paid out everything in dividends not even by a long way. This cash shoes the company is conservatively run so it is a good thing. This cash is profits and has had tax paid on it at the company tax rate which is much lower than the top personal tax rate. For a company like BHP it makes sense to pay dividends because a lot of their ownership is super funds paying 15 percent tax. For a company where the owners is mostly individuals it does not make sense because the personal tax rate is higher than the company tax rate. So the logic behind a company paying dividends is driven by the tax system. That is why American companies pay less dividends that Australian companies because their tax system is different. I agree the chairman is only paid a small fee but if you look at the dividends he receives it would out him in the top tax bracket. And the executive directors do receive high salaries plus dividends. I doubt that Lyco will be paying out a huge special dividend even though it has more cash on its balance sheet than it needs. Personally I would like to see them do a buyback at this low share price.
LYL Price at posting:
$3.82 Sentiment: Hold Disclosure: Held
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