Intermin Divi Imminent?, page-49

Hi Folks

Some months ago after I posted a hand drawn chart of the Spod $US prices reported in the PLS quarterly report Jun 2021 - Sep 2023, then I decided to estimate the $AUD revenue expected in the upcoming Dec 2023 report.

I posted my estimate for the upcoming Dec report at around $AUD 400m and so the expected Half yearly revenue report to be around the $AUD 890m.

From the time of my modelling the Spod prices have declined fairly sharply. So my estimate may be a tad high but too hard to adjust for now.

In the previous Dec 2022 half yearly report revenue was $AUD 2,180m with the net profit attributable to members being $AUD 1242m. Resulting in an 11c franked dividend.

My (maybe high) revenue estimate is $AUD 890m so my ball park estimate for net profit attributable to members is $AUD 500m. Using the same ratio's that would result in a ballpark franked dividend of 4.4c. That's assuming that they keep same percentage of FCF which is in the 20-30% range.

My expectations given what's happened to the Spod prices in my modelling and the reaction by PLS that they may head for the bottom range of FCF percentage being 20%, resulting in my expected franked dividend of 3-3.5c.

My initial reaction was, wouldn't it be wiser for management to bypass the half yearly dividend (saving costs) and just pay a final yearly dividend.

On reflection, I have adjusted this view, why?

Because of the nuisance value it causes to shorters. The borrower of shares is not entitled to the dividend, but has to compensate the lender of the shares for the dividend. It can be done (many do) but causes some fuss to others. For some it could be simpler to return the shares before the ex-div date and then reborrow if you want to maintain a position. Have a look at the Shortmans charts for the periods before expected dividend especially Jan Feb 2023 and Jun Jul 2023 as there was a temporary reduction in shorts in those periods. Then they got back in again.

Just my thoughts DYOR.

cheers Lies