(24-08-2012, 02:29 PM)CityFarmer Wrote: [ -> ]The share buy-back occur almost on daily basic since 13 Aug i.e. 2 weeks ago.
So far the shares been bought back accumulated to approx 17 mils share. Definitely a good news to shareholders
The problem is, number of shares had gone up a lot due to warrants conversion,
FY10 (Jun) : 331,554,249 ; Wrt13 = 162,457,625
FY11 (Jun) : 458,184,969 ; Wrt13 = 199,413,377 (Increase due to 1-for-4 Bonus Issue)
FP12 (Jun) : 553,559,203 ; Wrt13 = 146,625,036
16-Aug-12 : 564,411,825
* Wrt13 : Exercise Price = $0.32 ; Expiry = 27 Sep 13
If you were an old shareholder, who'd been getting the warrants for free and exercising them, then, no problem, as the total dividends you're going to get will be at a good yield.
But, new shareholders will suffer if their earnings are unable to catch up with the new nett increase in number of shares. For eg., DPS,
FY10 = 3.8ct (331,554,249 shares)
FY11 = 3.2ct (458,184,969 shares)
For the coming FY (Aug), despite a 14mths period, the DPS may be hard to hit even 3.2ct, unless they increase the payout ratio.
Due to their aggressive Shares Buy-Back lately, it's also hard to buy at a lower price... Still, I just got vested today @ $0.39 after queueing in vain for the past couple of days at a lower price. Have to Q before they start their buying, even at this higher price...
I do have some concerns about their 'Financial Management' ie. low cash - free cash used for REITs, shares buy-back, buying distressed retail shops,... short term loans,... but have convinced myself to take a small position 1st and either sell all or buy more depending on what other data I manage to dig out in the coming days, weeks, months..