SPH – Lim and Tan
• SPH has cut the special dividend to 8 cents per share. Combined with the unchanged 9 cents final and 7 cents interim, the yield is 6.3%.
• While understandable (dividend for the year of $386 mln already represents close to 100% payout), it is disappointing, considering that the $109.3 mln profit decline to $388.6 mln* for ye Aug ’11 because of the absence of property development profit is long known (profit from Sky @ Eleven, which totaled $154.2 mln for ye Aug ’10, ceased from Q4), and management had kept the interim dividend for half year ended Feb ’11 unchanged at 7 cents.
* Recurrent earnings effectively improved by $24 mln / 6.3% to $409.0 mln, especially in Q4 when it came to $103.6 mln vs $75.4 mln year before.
• We maintain SPH’s board should commit to a clear dividend policy, given the monopoly of the newspaper business.
• Still, the 6.3% yield should continue to provide good cushion to SPH’s share price.
• BUY especially if the stock should react negatively to the dividend cut.
SPH – Lim and Tan
• SPH has cut the special dividend to 8 cents per share. Combined with the unchanged 9 cents final and 7 cents interim, the yield is 6.3%.
• While understandable (dividend for the year of $386 mln already represents close to 100% payout), it is disappointing, considering that the $109.3 mln profit decline to $388.6 mln* for ye Aug ’11 because of the absence of property development profit is long known (profit from Sky @ Eleven, which totaled $154.2 mln for ye Aug ’10, ceased from Q4), and management had kept the interim dividend for half year ended Feb ’11 unchanged at 7 cents.
* Recurrent earnings effectively improved by $24 mln / 6.3% to $409.0 mln, especially in Q4 when it came to $103.6 mln vs $75.4 mln year before.
• We maintain SPH’s board should commit to a clear dividend policy, given the monopoly of the newspaper business.
• Still, the 6.3% yield should continue to provide good cushion to SPH’s share price.
• BUY especially if the stock should react negatively to the dividend cut.
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