The Lemon Fool

Can be found here:
www.investegate.co.uk/article.aspx?id=2 ... 8931J&fe=1

Divestment of SA coal here:
www.investegate.co.uk/article.aspx?id=2 ... 8930J&fe=1

Dividend details;
www.investegate.co.uk/article.aspx?id=2 ... 8932J&fe=1

South32 Limited (ASX, JSE, LSE: S32; ADR: SOUHY) (South32) announced that the Board has resolved to pay a final dividend of US 2.8 cents per share (fully franked) for the full year ended
30 June 2019.
The record date for determining the entitlement to dividend is 13 September 2019; payment date is
10 October 2019.

So that is a significant dividend cut. Last year they paid 4.3+6.2c and a special of 3.0c; this year they have paid/will pay 5.1+2.8c and a special of 1.7c. So even disregarding the specials that's a 25% cut. However they are increasing the share buy back by $250m.

Their headline states: South32 delivers strong operating result, reshapes portfolio and increases returns to shareholders

I didn't know whether to laugh or lachrymate at the last bit of this sentence about increasing returns to shareholders. Normal divs have been cut by about 25% as you say. Worse with the specials.

When does a cut div represent an increased return to shareholders?

When it, with no trace of irony, includes the buybacks as part of the "return". Talk about smoke and mirrors.

Have you as a shareholder seen any of that increased "return"? Neither have I. We see only a sizeable cut.

It used actually to be illegal for a company to acquire its own shares.

I am also completely baffled by the headlines v the actual dividend payments!

I think I am not alone, as the share price has reduced significantly in the last few days.

I think the reason for the cut is the “40% payout of earnings” dividend guidance.....and of course earnings are down.

I wish they wouldn’t buy back shares, as there is no obvious benefit to the HYP investor.

Disappointed!.....but maybe they will return some capital if/when they sell their coal assets. I’d rather just have the dividends.

FD

Yet, when I argue against buy-backs, there are people even here who claim they are Great Good Things.

If there is anything "good" about it, I'd say it is not easily felt and would go unnoticed by the average shareholder.


Arb.

viewtopic.php?f=8&t=19179

Happy to say that you are wrong, but this is OT for HYP board so will make the pro-buyback case elsewhere.

funduffer wrote:I am also completely baffled by the headlines v the actual dividend payments!

I think I am not alone, as the share price has reduced significantly in the last few days.

I think the reason for the cut is the “40% payout of earnings” dividend guidance.....and of course earnings are down.

I wish they wouldn’t buy back shares, as there is no obvious benefit to the HYP investor.

Disappointed!.....but maybe they will return some capital if/when they sell their coal assets. I’d rather just have the dividends.

FD

It means there would be fewer shareholders to share that much reduced dividend between so a huge benefit, unless of course they are gifted to the top brass as zero cost options.

I see little point in complaining about a policy you have no control over. If you follow a strict strategy based around receiving dividends (as opposed to say total return) then you'll just have to lump it.