"My thinking is because Scentre own so much of it they will milk...

"My thinking is because Scentre own so much of it they will milk this with a dividend to pay down their group debt"

I doubt that will feature as a reason for re-instatement of the dividend.

SCG has over $9bn in Borrowings.

Their share of CDP's dividend in recent years amounts to around $16m pa, so an amount equivalent to less then 0.2% of SCG's debt.

CDP is little more than one of the pimples on SCG's behind.


As for guessing CDP's dividend, as a shareholder I vote for no dividend because the balance sheet needs to be de-leveraged following the 14% write down of the property value in the FY20 accounts, combined with the 10% increase in the borrowings over the past 12 months.

As can be seen, debt metrics are at two-decade highs and I think it would be imprudent for the board to not continue to take steps to address that issue:





Sure, interest rates are at historical lows, but operating a business on the assumption that will be the case indefinitely is not the sort of risk management philosophy I expect from the managers of my investee companies.

At the current market value of the company, the cost of equity is high, making a capital raising highly undesirable (besides, an equity raising would be tantamount to taking funds from shareholders only to give it back to them later in the form of dividends).

So the balance sheet needs to be restored and the only way that can happen is by withholding returns to shareholders for a little while longer.

In summary, my call is for zero dividends for the next two financial reporting periods, a measure which would get gearing back down to the more palatable low-50% level.

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