Originally Posted by
Snoopy
The TRA dividend policy is to pay out 50-60% of earnings as dividends. Grant Baker in the October 2018 shareholder update states:
"We are targeting a minimum FY2019 dividend of 17cps."
Based on 84.802m shares on issue, the total money to pay this dividend will be:
0.170 x 84.802m = $14.4m
The projected profit for FY2019 was for NPBT of $34m to $36m. We are told that NPBT could be impacted by 5 – 10% from the previous guidance range. Worst case this means NPBT of $30.6m to $32.4m. Take off tax at 28% and this leaves an NPAT of: $22.0m to $23.3m. This means that the projected $14.4m dividend would take 62%-65% of earnings: above the 50% to 60% dividend guidance range. However, I would be surprised if dividends were actually reduced, even in this most pessimistic scenario. That's because once dividend goals are announced, and are well covered by earnings, management do not like to back flip.
If there is to be a reduction in dividends, that might come in FY2020. But FY2020 is an entirely different year. Who knows what conditions in the used car market will be by then.
SNOOPY