. Thanks Rovic for the clarification. . * That was CUE first dividend, so it may continue to increase for some time. * 50% rise is large ,but a lot smaller than for other sectors when they pay the first dividend. . . CUE Metrics: CUE gross profit has grown from 10 million to near enough 30 million over the last 3 years. Gross margin was 56%, NPAT 29.5%, Profit before tax has been growing 19% a year. Profit before tax normalized before tax over enterprise value was a 59%.
These are very good fundamentals, but i believe SHE will be stronger relative to market cap and even more so in a few years.
SHE is still young SHE is a much smaller and younger company and a large dividend such as 20% this early might be considered as unsustainable or premature, but a dividend of say 3% to 5% wont harm their cash position whilst only consuming 6 weeks of current EBIT. . Personally i would rather wait until they had at least their 4 earned sections producing, when cash flow and cash reserves are stronger. Then any subsequent dividend issued would be perceived as more sustainable.
I realize understandably that some holders might reasonable want to Cash out their investment at a reasonable price and a dividend will increase both liquidity and the share price allowing them to cash out. . . Future Market cap with 1 set of wells at P/E ratio of 4.5 In 2.5 . years we are looking at 15 million cash+EBITDA of 5 miilion So theoretical market cap = 15+5*4.5 = 37.5 million market cap. . Future Market cap with 3 set of wells at P/E ratio of 4.5 After 4 years , Cash= 58 million, and annual EBITDA is around 28 million So Market cap =58 million + 4.5 * 28 million= 184 million market cap. .
Dividend strategy. A good dividend strategy would be 1) Directors buy in once or twice 2) Issue an announcement of a official sustainable dividend policy. 3) Another buy in. 4) Issue a series of dividends. . If they did they when the EBIT is high then we could be looking at massive re-rate of SHE. . ATP dividend came out of the blue but they were printing money relative to market but not as strongly as SHE currently is . GRR verbally indicated that they would pay dividends once cash reached a threshold value, and holders did lobby the B.O.D. . Thanks for your post Rovic comparing SHE to CUE as it should give encouragement to others.
