Speculations as to why dividend is forthcoming for the year ended 30 June 2009:
(1) Accumulated losses as at 31/12/08 = $90.047m. Therefore, it is possible little or no income taxes is payable, as a result, no franking credit will be available to frank dividends. It is dumb to pay dividends under such circumstances.
It is also prudent to clear out the accumulated losses before declaring a dividend.
(2) Share buyback is more attractive for long term holders with discounted capital gains for those holding more than 12 months.
(3) A higher share price through share buyback is also attractive to the BTA non-executive directors, CEO and executives with their shares held under their NEDSOP, BESOP, ERIO and LTIO plans. Absolutely tax effective too, if they elected to pay tax upfront on these share-scheme shares and be taxed under the CGT regime on the increased share price.
Then again with the volume of cash pouring into the company, the Board may well be tempted to reward long- suffering shareholders with a maiden(?) dividend but I would be most surprised going by their past behaviour.
Please DYOR before dealing in BTA shares or any financial products.
BTA Price at posting:
$1.31 Sentiment: Hold Disclosure: Held
