Post #: 65733212Furthermore, to the above post, management would...

Post #: 65733212

Furthermore, to the above post, management would have paid out the full year dividend of 40 cents for FY22 in anticipation of a large off market buyback with retained cash and franking credits.

Not long after the full year results the federal government released amended treasury laws that made franking credit funded off market buybacks a thing of the past. Now the only way to effectively use franking credits is through dividends.

If management had known this prior to full year dividend announcement one would think they would have increased dividend distribution significantly. Now that the writing is on the wall and is clear that on market buybacks cannot keep up with cash accumulation, we can expect aggressive fully franked dividend payments going forward. KMP have large shareholdings so they will benefit all the same.

It will be interesting to see how the market responds to say, a 25% dividend distribution for the half year? Market does not seem to be thinking this way because the possibility of this happening seems too far-fetched (compared to broader ASX pool of companies) despite the fact that all the numbers are there to support this scenario as a most probable outcome.