Zamano – Time For A Dividend & Your Support…

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dividend coverage, dividend payout ratio, dividend yield, Irish value investing, John Rockett, Pageant Holdings, Ross Conlon, shareholder activism, shareholder value, Zamano, ZMNO

Here’s a recent letter I sent the board of Zamano plc (ZMNO:ID, ZMNO:LN) – it proposes the company now commence paying an annual dividend. I’m also now actively seeking the support of my fellow shareholders:

‘27-Feb-2016

FAO:   John Rockett, Chairman
            Ross Conlon, CEO

Cc:      Pat Landy, NED
____- Colin Tucker, NED
______Fergal Scully, NED

zamano plc
3rd Floor
Hospitality House
16-20 South Cumberland St
Dublin 2

Gentlemen,

Pursuant to my last Zamano post, I want to thank Ross for responding to the shareholders who contacted the company regarding my annual dividend proposal. A number of shareholders have also contacted me directly to confirm their support – I now speak for 13.1% of Zamano’s outstanding shares. Noting this support & the upcoming Mar-10th release of Zamano’s final results, this is a good opportunity to write to you more formally & reiterate my dividend proposal:

– Zamano’s been profitable for the past four years now. Since 2011, the company’s revenue has increased by 55% to a €23.3 million annual run-rate, annual EBITDA has averaged €2.6 million, while annual free cash flow has averaged €2.5 million (for FYs 2012-14). This has now resulted in net cash of €5.4 million on the balance sheet, versus €4.4 million of net debt in 2011, a near-€10 million swing in the company’s financial position.

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Chasing Some Dividend Tail (III)..?

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Autozone, Bernie Madoff, Big Ang, Character Group, dividend coverage, dividend yield, enhanced EPS/NAV, gold, income/dividend bubble, investment companies, JAKKS Pacific, Liquidations, Livermore Investments, M&A, share buyback, tender offer, trading sardines, wind-down

Continued from here. OK, so dividends kinda suck…but what’s the alternative? Well, let’s tackle that from the corporate perspective first:

– Obviously, share buybacks (and/or tenders & capital returns) are generally a far more tax-efficient means of distribution to shareholders. They enhance earnings, or significantly increase NAV/book value. [Just look at the amazing run on Autozone (AZO:US) – yes, they’ve had great execution, but much of its performance is down to aggressive/sustained stock buybacks]. It also permits management to be far smarter & more opportunistic in their distributions, and their response to share price volatility.

– Just as important, it frees management of the potentially absurd strait-jacket of maintaining an inappropriate dividend – which, in extremis, leads to management idiotically borrowing just to fund a (tax-inefficient) dividend. On occasion, this is exactly the point where management tips over from ‘gently deceiving‘ shareholders into downright criminal/accounting fraud…

Chasing Some Dividend Tail (II)..?

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Avon Products, dividend coverage, dividend snorting, dividend yield, income/dividend bubble, Ponzi, REIT/MLP sector, Supervalu Inc., tax-free compounding

Continued from here.

OK, so what’s wrong with a focus on income/dividends?

– Erm, everything..? I wrote about this recently – a focus on a single investment attribute’s always dangerous, but dividend yield certainly seems the v worst of the bunch to me. Sure, it all starts out innocently enough… You have a little toke on a 4% yield occasionally – feels good! But all too soon, it’s not enough – you end up calling your broker every single day, snorting up 6% yields left and right. But it’s OK, it’s low risk, you still know what you’re doing – not like those other losers… So how come I came across you the other day, twitching on a park bench, scanning the dividend column in the FT, muttering ‘All I need is just one more 9 per-center…‘?

– A ‘good‘ dividend yield can’t save a bad share. I wonder how much money’s been lost by people saying ‘…but hey, it’s got a great dividend…‘? All higher yields mostly seem to offer in a portfolio is a gradual migration into mature and/or declining businesses. And what does that offer in terms of upside?! Even worse, it leaves nowhere to hide when the dividend’s compromised – your income drops, and the share price crashes…

Chasing Some Dividend Tail (I)..?

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AIM stocks, dividend coverage, dividend yield, Expecting Value, income/dividend bubble, pitch books, REIT/MLP sector, Richard Beddard, Stockopedia, survivorship bias, tax, tax-free compounding, The Reformed Broker, UK Value Investor

There’s been a lot of good dividend commentary & debate in the UK blogosphere recently. Stockopedia seems to have ignited the debate:

http://www.stockopedia.co.uk/content/the-dividend-puzzle-or-why-the-dividend-emperor-may-have-no-clothes-66275/

Expecting Value & UK Value Investor chimed in with these:

http://expectingvalue.com/aroundtheweb/friday-reading-29#more-2326

http://www.ukvalueinvestor.com/2012/06/how-to-find-the-best-high-yield-shares.html

Hitting The Century (III)

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Argo Group, Avangardco, dividend coverage, dividend yield, EIIB, Ex-Cash Ratios, FBD Holdings, Net LTV, P/E ratio, Petroneft Resources, portfolio allocation, portfolio performance, Price/Book, Price/Sales, TGISVP, Total Produce, Trinity Biotech, Wordpress

Damn WordPress! If you viewed/received a similar Century (Part III) post (since deleted), please ignore it – it was just a draft & I’ve updated/revised figures across the board since. Not quite sure how WordPress managed to publish it for me..!

Right, continued from here. In my last post I promised: ‘OK, next I’ll take you through each of my investment allocations – and try to give a flavour of my thinking, and some underlying stocks/funds, in each instance‘. However, I’ve just completed a detailed quarter-end portfolio update/review, so let’s flip things ’round – perhaps you’d be interested in a timely look at some portfolio metrics¹, and we’ll return to investment allocations in my next post?

Yes, really? So you like the pretty panties, but you still want to know the damn cost..?! Sigh, value investors..! OK:

Seduction…and Neglect?! How About a Catalyst? (Part II)

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dividend coverage, dividend yield, Event Driven, Expected Value, Interior Services Group, IRR, Joe Lewis, Leo Fund Managers, Magnier & McManus, Margin of Safety, Risk Arbitrage, Timeweave

Continued from here:     OK, so we’ve defined what a stock catalyst is, and also recommended you evaluate catalysts from an IRR perspective.  This is the best way to highlight how they can deliver a dramatically improved return, due to the (potential) acceleration of value realization.

If you really want to complicate your life, you could also layer in an EV approach…the analysis that is, not the blog! Let’s not dig into the math/mechanics here, but it spotlights another attractive feature: A catalyst may prompt you to attach higher probabilities to positive/specific/increased return scenario(s), thereby increasing the Expected Value of your investment return. For example, Risk Arb (and many Event Driven) opportunities offer a specific price ‘target’ and timeline, with a high probability attached to this outcome, so EVs (and, of course, IRRs) can be pretty tasty!