Originally Posted by
DonkeyKong
Just for a bit of fun. I am pulling out the crystal ball.
As has been covered on this thread before. “The final dividend has been declared on the assumption that New Zealand is predominantly at Level 2 from the end of October.”. With key word “predominantly” being somewhat vague. And which measurement they would use also being vague.
The definition of “predominantly” is “for the most part“.
It is most likely Auckland and parts of the Waikato will still be in level 3 at the end of October.
At 30 June 2021, stats NZ estimates the NZ population to be 5,122,600 and Aucklands at 1.72 million. At the 2018 census they have Waikato at 458,202. So without taking into account it being parts of the Waikato region in level 3. Auckland plus Waikato is roughly 42.5% of NZ.
So if they used population as the measure. Then by definition, New Zealand is “for the most part” in level 2, i.e. at 57.5%. However, not significantly for the most part.
Which means they could give the dividend. But since it is not significantly for the most part, they could be prudent and justify not giving the dividend.
So what else might come into play?
- There is the cash burn issue beagle has mentioned. (I haven’t looked into this myself)
- The new traffic light system should come into play for Auckland in December. Opening retail shopping at the physical stores for the warehouse group.
- Do they use a measure other than population? Eg store locations?
- 70% of WHS shareholders are insiders. Do they want their dividend or would it shoot them in the foot? How much influence do they have?
My prediction. They will cancel the dividend to see how the Christmas period goes. And a reaction share price drop of 5-10% i.e. the dividend plus a little bit more for panic selling. Then if things go well, maybe there will be a special dividend.
Putting away the crystal ball now.