"Presumably management would only deploy the Capital IF they...

"Presumably management would only deploy the Capital IF they judged the rate of return on that Capital to be sufficient to justify the investment."

Returns on Capital have been on a two-decade secular decline, including during periods where there was no gorilla-sized renovation was undertaken:



Which means the Return on the marginal dollar converted to Assets is going down, not up.

I've no basis at all to think that graph will magically turn in the opposite direction.


"I thought CDP might be a touch more parsimonious on the last distribution so I've taken their generosity (with our money) as a sign of confidence."

I prefer to perform my own independent assessment on how things stand, as opposed to taking at face value what company executives say and/or do.

My assessment is that a capital crunch looms at some stage, and they are merely kicking the can down the road. At the end of the road a sizeable capital raising awaits.

It's a challenged business model.


"Weren't you muttering something earlier about the need to rein in dividends? Maybe you should ask your new charge to write to management."

If I were a meaty enough shareholder I might put pen to paper in an endeavour to protect my capital by calling for a meaningful reduction in distributions, thereby presenting countervailing argument to my fellow shareholders who - I'm guessing - would overwhelmingly be of a distributions maximisation frame of mind.

But this discussion is circular, because that I might have needed to engage with the board on this sort of thing means I would have made a fundamental investing error to begin with.

And, realising that, I would have sold my shares instead.

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