What people do not understand - and this is entire my analysis/opinion - is that if Centrepoint are shifting managed accounts away from Ventura to HUB24, this frees up $5m of cash which Ventura/CAF are obligated to hold on the balance sheet pursuant to Responsible Entity NTA requirements/AFSL conditions.
As last reported, Centrepoint held $7.4m in cash + $7.9m in interest bearing receivables (mostly from the sale of Neos Life).
So if that $5m of cash is unlocked, in theory, CAF could return $15m to shareholders on a fully-franked basis. That's 10 cents per share in dividends + 4.2857 cents in franking (for those on 0% tax rates).
In other words, investors buy the shares for 14 cents and get 14 cents back in cash, and still own the business.
As I understand, major shareholders have already shown their preference for the returning of capital via FF dividends. This was what happened after the sale of the Premium Funding business.
I think however CAF is climbing (while FID and CUP are declining) because advisers are flocking to CAF as indicated by the record number of additions.
IMHO.
CAF Price at posting:
13.5¢ Sentiment: Buy Disclosure: Held
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