Hi gassin, I'm a holder, admittedly a very minor one, but was still wondering if you brought up the other really obvious issue here in your conversation with Wayne around their proposed expenditure on store expansions/refit and how they plan to treat that expenditure. Because by all accounts it seems to me that their intent is to expense another $13 million or so in the second half of the financial year, meaning any talk of a dividend becomes redundant no? Given the dividend will be based on profits and not available cash and with an additional $13m of expenditure it's unlikely there will be not much if any profit left.
There is no indication based on their communication to date that they plan to capitalise and depreciate the purchase and refurb the cost over the life of the assets but rather intent to ensure it's fully expensed in this year, consistent with how they describe the accounting treatment of their head office - $1.5m already 'expensed' in first half and $0.5 to be expensed in second half. With now seemingly an additional $13m to be expensed in second half too.
If you take a cautious or pessimistic outlook on this you could see it as a potential attempt to prevent having to pay out any cash to shareholders through accounting methods whilst investing in infrastructure overseas partly funded by capital raised here - which would not be an ideal perception for investors. Would be worthwhile clarifying, no? Maybe it's just the office that they wanted to fully expense this year and the stores would be recognised in a more conventional way? It just makes me think that if they have expensed one they will expense all and then start to question their motivations for doing so........ making the divi seems further and further out of reach.
