dave3107,I think the rise in expenses is consistent with the...

dave3107,

I think the rise in expenses is consistent with the rise in revenues and nothing to worry about. However, I have said before and maintain that BGL will not get back to the type of EBITDA and NPAT margins they achieved prior to the CVA acquisition.

On dividends, I personally dislike dividend policies such as a 50% payout ratio,it tells me straight away that management don't know how to deploy capital in the most efficient manner.

If a business can reinvest all profits at high rates of return then it should pay no dividends, however if they are unable to reinvest capital back into the business because of a lack of opportunities or they can only generate low returns, then they should return capital to shareholders. Management should be performing this type of analysis all the time and not sticking to some predetermined policy just to keep shareholders happy. Shareholders that demand dividends when the business is reaping high returns on capital are cheating themselves out of share price appreciation and management that indulge such demands are incompetent at best.

The above is not an opinion it is a simple mathematical fact (the proof of which I will be happy to provide if anyone is interested).

As for BGL, they will be in a position to pay fully franked dividends by the end of 2012, assuming no large acquisitions, but again that should depend on what opportunities are available to deploy excess capital at the time and what type of returns are available.