Ann: Investor Presentation Operational and Trading Update, page-20

In terms of shareholder returns, for the past 2years they've paid 1.25c dividends for each half. 2.5c/yr on a 66c share is only a ~3.8% yield, and it's been a flat dividend with no increases so factoring in inflation the dividend has technically been falling. But they have also been doing a buyback! O wait, shares on issue has only fallen 3.7% over two years though (539M in 2021 to 519M now), an extra 1.85%p.a. for shareholders on top of the yield...I actually I thought they had been buying back more aggressively than that, maybe they've been giving out lots of share-based compensation that has cancelled out some of the buyback? Not sure.

Anyway, div + buyback adds up to a ~5.5% return. That's in a similar ballpark to the big banks...so why would I take the risk of this tinpot mining services company? Debt seems to be under control so go broke risk is probably low, and maybe returns would have been lifting already if we didn't then suffer a ~$20M writeoff and lose a contract, but we did. It looks like we've replaced that revenue, which is no small achievement, but that still means we're just back to where we were about a year ago.

If you want to see an SP back near $1, EHL needs to string together a couple of reporting periods of consistent and solid results with no setbacks, and show some growth in shareholder returns. That dividend needs to start to lift - paying an extra 0.25c would cost them $1.3M per half. Personally I think it would be worthwhile to reduce any buyback by that amount for the benefit that it signals to the market that the company actually sees a future of growing returns, whereas leaving the dividend unchanged for 4 reporting halves says "no growth here!".

As I've said before, my personal ongoing concern is that since the world emerged from covid we've been in a pretty stable mining boom with most commodities near record prices...but EHL doesn't seem to be booming. Maybe we're too small to have any negotiating power and push through price rises, I don't know, but if this is EHL's performance in a boom time then I worry about our capacity to cope with any downturn.