WAA is proposing a capital return of 4.0 cents per share as it has not the profit or franking credits to pay a dividend.
This is being done to keep faith with investors who are reliant on dividends as an income.
While this is great for investors in the short term it should be remembered that Geoff Wilson had stated on a previous occasion that he wanted the company to be capitalized at $100 million & it is currently about $40 million which is before the 4.0 cents capital return.
Consequently when WAA manages to get back on track & the net tangible assets increase you should be looking forward to the issue of free 1 for 1 options to increase the company's capital.
The larger the capital, the less significant the costs of running the company. That is why Geoff wants to increase the capital in the long term.
The potential free options could be a reason why the shares are trading above nta.
WAA Price at posting:
$1.11 Sentiment: Buy Disclosure: Held
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