Ch Ching Biota to Return $20 million to Shareholders
As Lady Sovereign aptly says, “less more, less more, less more money ch ching.” I not sure exactly what that means, but I know you can never please all of the people all of the time. That is the dilemma Biota faced with a growing cash horde and some investors clamouring for a dividend. With 175M shares outstanding the $20 million equates to slightly more than $0.11 per share. Biota are yet to get a ruling on whether all or part of the cash return will be treated by the ATO as a capital return which would be jolly nice or as a not so nice unfranked dividend. Less money for Biota, more money for shareholders Ch Ching. I’m indifferent to the money, but happy with the signals it is sending the market; sensible capital management and security of future cash flows.
The good news is Biota management are actively managing their capital and are clearly confident in their future cash flows to be returning such a large chunk to investors. With the recent share price appreciation Biota’s previous method of return via share buy-backs has become less attractive. This move should also shorten the next AGM by an hour or so by removing all the calls for a dividend. At the current share price of $2.10 the capital return represents a return of 5.2%.
Biota Holdings Limited (ASX: BTA) today announced that it intends to make a return of $20 million to shareholders. The return follows a recent and extensive review of the cash requirements for the growth of the business and the improved trading conditions forecast in the near term for the company.
The record date for the payment will be 19 November 2009, subject to receiving shareholder approval if needed, at the forthcoming Annual General Meeting on 12 November 2009. Shareholders would receive payment in early December 2009.
Based on the current number of shares on issue, the cash payment is estimated to equate to approximately 11 cents per share.
Biota’s full year results, including a summary of its plans for growth, will be announced on 19 August 2009 and in subsequent presentations.
via Biota announcement
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