Th eboadr have been telling us that they reckon they can spend our cash more wisely than we can.
Their most recent wise decision was to participate in the Synlait Capital Raise when they must have known china sales were looking poor - which obviouslyy means less product needed out of Synlait.
Given today's Synlait Downgrade (I reckon this wol go to $3) Synlait has lots of surplus capacity. So does ATM need to buy Mataura?
I reckon buying Mataura still makes sense. A2M have the cash - so they may as well invest in a bit of diversity away from Synlait (did you ssee what I did there ?)
But given that do they need any more capital intensive investments? For the next 12 - 18 months I think not.
So lets assume $750m cash, plus this years profit of $250m, less $250 for Mataura I reckon they can easily afford a 50% special dividend and then a dividend policy of 50% of NPAT.
A2M Price at posting:
$10.14 Sentiment: Sell Disclosure: Held
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