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Carter Holt not ready to shout the next round

By Phil Boeyen, ShareChat Business News Editor

Wednesday 9th August 2000

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Carter Holt is keeping a tight rein on its strong balance sheet, saying it won't be distributing any funds just to gain short-term analyst recognition.

After its Chilean divestment the company says its balance sheet is in the strongest position for at least ten years, and
CEO Chris Liddell says that strength is something to be jealously protected.

He says despite pressure from market analysts to immediately distribute some of the funds, he doesn't want to do something against the long-term interests of the company just to gain short-term analyst recognition.

Carter Holt is bullish on its next result, and says barring any unforeseen external upheavals it is clearly on track to significantly exceed last year's profit. CAH ended the 2000 financial year with consolidated net earnings of $202m, a 226% increase over the previous year.

However the company is being cautious towards dividends.

It says its board has a guideline of paying around 40% of earnings over a three-year cycle and for both the 1998 and 1999 years the dividends paid to shareholders exceeded net profit, with the dividend payout ratio being over 100%.

The board says this level of payout is clearly not sustainable, and it is not prudent to increase the dividend rate until it has confidence that there has been a sustainable increase in earnings.

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