Forum Archive Index - May 2004

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Dean,
 
> 
>>> I used 11.5c
>>>
>>
>>That figure was based on earnings at the peak of the commodity
>>cycle, so I think it is a less realistic base figure than 8.5c that
>>has already been forecast as the dividend by WRI management for 
this
>>year.
> 
>Fair call.  The directors are always loath to cut dividends as it
>makes them go red under the collar at AGM's, so I assumed that WRI
>will try to ride out the low by not cutting theirs. Ive just this
>moment lost my appraisal eport  - aren't they are also paying a
>special dividend to keep the div around the same level?
> 

Yes WRI are paying a special dividend,that does happen to keep the 
overall annual dividend steady.   However, since this was announced 
partly as a response to the Norgate bid, my guess is that this was a 
defensive measure.  The WRI dividend *would* have been cut, had 
Norgate not appeared on the scene with his RPI bid.

Personally I would not build a business valuation model based that 
stretches many years out into the future based on the assumption that 
'a Norgate' will appear every year to make sure that the dividend is 
never cut. 

SNOOPY



> 
> > Both the figures $1.47 and $1.54 are surprisingly close to Norgates
> > $1.50 bid.     That suggests to me that Norgate is not paying for
> > any share price appreciation of WRI if he gets the reigns of
> > control.   A tacit admission that he can't do better than the
> > current management?
> 
> Very good. I guess the point of the exercise in the long run is the
> analyst that can predict the future variables better than any one else
> 'gets the gold'.  If I do decide to continue to hold WRI I hope you're
> right and I'm wrong :-)
> 
> cheers Dean
> 
> 
> 
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