The treatment of the shareholders is no different to how the board treats the accountants, the DEP (direct equity plan) has been talked about for 2 years and they are now according to the ASX Announcement in Advanced Discussions with several accounting firms. The press release did not disclose that one of the accounting firms rejected the DEP offer as too expensive and all 5 Principals have left the firm. So there is no one left to run the business and hence the merger.
But what you really need to focus on is the Consolidated Statement of Cash Flows. The fall in the Net Cash Inflow from Operating Activities (see below) highlights falling cash profits and a dividend policy that was never sustainable. The only way the dividend policy is maintained is by selling Class Super shares. There are no more shares to sell. The new dividend policy is 40% to 70%. So what will the net cash inflow from operating activities be in the 6 months to 30 June 2017? No profit warning, so it will be interesting to see the actual results. Hope the directors have insurance as if there is a substantial decrease in profit and no profit drown grade, then investors who have been buying shares then the directors are open to a class action.
Column 1
Column 2
Column 3
Column 4
0
6 mths 31/12/15
6 mths 30/6/16
6 mths 31/1/16
1
Net cash inflow from operating activities
$6,042,000
$4,241,000
$2,996,000
2
Dividends
$4,559,000
$4,559,000
$4,559,000
3
% dividends paid out
75%
107%
152%
CUP Price at posting:
52.0¢ Sentiment: Sell Disclosure: Not Held
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