Our disappointment is dividends, but we will be rewarded for patience
The single biggest disappointment of reporting season was in the level of dividends.
The takeover of Energy Developments meant that its (otherwise gargantuan) dividend ceased (this has a big impact). The lack of dividend from South32 (only listed 100 days), Pacific Brands (it will start strongly next year) combined with smaller than expected pay-outs from Ingenia (focusing on long term growth) and Cardno (focusing on reducing debt) meant that 2H dividends that were (against trend) down on the 1H.
This is mostly a matter of timing.
We expect as South32 and Pacific Brands (re)start paying (along with Emeco, Ausenco and Heemskirk in future periods – we are confident in this) and we find uses for our significant cash pile we will see considerable growth to make up for this benign period. We are not sure if you would feel so confident if you were just invested in the broader share-market.
Ultimately, it is the dividends you get, and the growth in those dividends, that will dictate the long term return you get from your investments. We are very happy with our outlook.