HY23 Dividend Predictions for 16th Feb?, page-51

Well, we got a 40c dividend last time, along with $550m allocated to the first buyback ($587.9m ended up being spent once completed in Oct 22). In total, refurn to SH in FY22 equated to a 51% NPAT payout ratio (when you include the interim 8c dividend too), which was the upper most range of the 20-50% payout guidance.

When punting on a similar divvy for the interim report, we had EBITDA for that whole year at $3.6b and it is expected to be $2.6b for only half of FY23.

But the capital allocated to the second buyback needs to be considered. If we look at what has been spent so far since commencement on 27 Oct (for one year ending 26 Oct 23) to buy back up to 240m shares, we've snatched back 40m shares for about about $367m. Assuming the buy back continues, and we have roughly 6 months to buy 200m shares (deducting blackouts and public holidays that fall outside it), around $2.2b in total would be spent (based on the past avg price paid per share),

The big question mark is over whether the buyback continues to be the best value of shareholder return. There is definitely an eye to maximise shareholder returns as either dividends or buybacks, as Flynn stated in his AGM speech:

'"Our aim is to return at least 20% and up to 50% of NPAT to shareholders through dividends and buy-backs, but if buying back additional shares continues to be more attractive than investing in growth then our payout ratio may be higher if there is surplus cash."

Furthermore, in the AGM presentation slides:

"NPAT payout ratio for distributions may exceed 50% if additional distributions are best use of surplus"