The relative benefit of on market buy backs also becomes...

The relative benefit of on market buy backs also becomes relatively less compared to dividends once sufficient franking credits have accrued in order to pay franked dividends.

That is because, when buying shares on market, there is no distribution of franking credits. As such, with off-market buy backs now dead, there reaches a point where continuing to buy shares on market will result in franking credits becoming “trapped” in the company, because all of those franking credits will be unable to be distributed with dividends. However, those franking credits are worth significant value in the hands of shareholders and leaving them trapped in the company deprives shareholders of a significant return (ie approx 30% on top of the cash value of the dividend).

An on market buy back could still be justified if the share price was significantly below its fair market value, but the SP has risen significantly since the first buy back.

This fact won’t be lost on management and so I expect that, with the off market buy back now dead, once the company has accrued sufficient franking credits to continually pay franked dividends I’d expect the on market buy back to slow significantly.