Just check their books and compare their dividends over the last couple of years with their earnings :p ;
Where is this dividend money coming from?
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IFT have done phenomenally well over a very long period of time. They have been very good at buying assets cheap, selling them high, or keeping them for high cashflows generated from monopoly situations. (I still grimace with annoyance every time I go to Wellington Airport, which has outrageously high parking costs. $40 per day - really? Thank goodness you can still park a bicycle for free if you just going somewhere for a weekend.)
This period has been a period of almost continuously declining interest rates, and a world-wide boom in asset prices. NZ was slow to reduce rates from the Volcker highs of 1982, and IFT timed their run from when NZ had more -or-less the highest interest rates in the OECD. It has been a particularly benign time for their operating model, and they have done it very well.
The decline in interest rates is likely over - zero is the bottom, it is up from here. So the big question is whether an operator that outperforms when interest rates are in a long term down-trend will outperform when the interest rate is going up. The big revaluations of the past are likely a thing of the past. They may be skilled in this environment, but will they be as good in a possibly different environment? That is the question that prevents me buying at $8. While I am a big believer that international green energy investments are going to be the story of the 21st century, the sector may be dominated by new players who invent the new technologies, rather than investors who spread them around the globe. Grenn energy has been a very popular sector for a decade, there are large number of international pension funds operating in it as well.
In the mean time I shall hold IFTHA, a nice alternative to vanilla bonds so long as you don't mind the fluctuations in the price, and particularly nice if you take advantage of the fluctuations to buy when very low. But not as good as the main shares over the last couple of decades.
CT
Do we always need Aussies to teach us how to interpret a fantastic result ?
We need bigger and better financial infrastructure based in NZ ...always need to wait till they open to tell us the true SP
Proud to be a holder of a very well managed NZ company.
Those fees to Morrison and Co for managing it are absolutely astounding. Some people set themselves up there with an incredibly lucrative management contract !
I think my most recent dividend (Dec 2021) was fully imputed (28%). Unlike my SUM dividend which had no imputation credit. I would prefer SUM to pay no dividend.
Infratil's dividend policy:
Infratil's Board determines dividends having regard to the overall financial position of Infratil, the total net surplus for the relevant period and the availability of imputation credits. Until 2018 dividends were fully imputed (ie to 28%), but the increasing portion of Infratil’s earnings now coming from offshore investments has restricted the availability of imputation credits (which are only created when companies pay corporate tax in New Zealand). Infratil undertook a survey of its shareholders and ascertained that a significant portion of them were comfortable with imputation of the dividends down to 20%. It is hoped that New Zealand sourced income rises with the purchase of Vodafone NZ and that this lifts the availability of Imputation credits to Infratil.
https://infratil.com/faqs/single/94
this has been debated extensively, and ACC as a major shareholder, led a - well you can't really call it - charge, to reduce these fees, and it was discussed at sharehlder meetings. They didn't get much backing from other shareholders.
Tongue in cheek, it's probably better for New Zealand, Inc, that that money be in the hands of Morrison and Co, than shareholders. Though I would have liked a slightly larger divvie this time round.
“Infratil’s after tax return since listing in March 1994 has been 18.7% per annum, and over the last ten years the returns have averaged 21.6% per annum after tax."
If u can do that on long term basis like they have done ....then u deserve every penny of those fees ...IMO