Old thread re-discovered -- the stock has done badly since the last posting.
41.5 cents currently. There is talk/hope/speculation of the same payout of a 5-cent dividend.
Are you trying to talk up Innotek share ?
The YTD FY11 3Qtr cumulatiive profit stands at SGD2.0 Mio. Innotek expects a weaker Q4, optimistically let say they manage to make SGD1.0 Mio. Projected annual profit for FY11 is SGD3.0 Mio.
Total share outstanding Issued & Paid-up Shares 225,233,000
In FY10, Innotek made SGD17.8 Mio profit, they can offer to pay SGD0.05 div. In FY11, if Innotek pays SGD0.05 cents per shares, total dividend outlay needed will be SGD11.26Mio
By doing so, Innotek will be doing a return of capital and not paying out of its operating profits.
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[viviene 20-01-2012]:
Old thread re-discovered -- the stock has done badly since the last posting.
41.5 cents currently. There is talk/hope/speculation of the same payout of a 5-cent dividend.
Leo, I agree with your points. To add, the chances of Innotek maintaing a 5-c dividend are very low because the cash & cash equiv has gone down substantially as at end-Sept. From $96 million to $54 million. The free cashflow in 4Q might be better than in 3Q as business got better but not in a massive way.
Hello Leo: Can't a company pay dividends that exceed the year's profits? I doubt Innotek would do it next month for FY2011 results, though, unless it's confident it can do well this year to ' catch up'. What do you think?
Yes. Innotek can pay dividends from retained profits (i.e. undistributed, accumulated profits from previous years) even though the company did not make enough profit for the dividend amount. It really depends on the decision of the Innotek board and where the board will be taking the company next.
In the past year, the board saw it fit to invest in Sabana Reit which is essentially saying that we got so much cash and since we can't buy new business, and since we can't use it operationally to generate any better return, so we are on going invest it on behalf of shareholders in a Reit instead of returning the excess cash to shareholders.
Sabana didnt turn out to be a cool investment, as Innotek bought at $1.05 IPO price. The price currently is 91 cents, so it lost 14 cents per unit!
The dividend return probably has not covered the hole opened by the capital loss (paper loss).
