Klogg is correct, they only have a small amount of franking credits left- you will see in the announcement that they are pre-paying a small amount of tax in H2 to be able to fully frank the interim dividend. I just spoke with the CFO who confirmed this is indeed the case.
Service Stream have accumulated tax losses and are on a tax payment holiday until approximately FY18 when they will have next have to pay cash on tax incurred on FY17 earnings.
I did query the capital return as opposed to a buyback (which could have been initiated last year) and the current management position is that it is more equitable for those who do not want to increase their percentage holding in Service Stream (given the concentrated shareholder base)- read what you will into that.
SSM Price at posting:
52.8¢ Sentiment: Hold Disclosure: Held
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