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Update: Tabcorp Had An Excellent H1, But Surprises With A Special Dividend

Tabcorp (TABCF) has announced stellar financial results for the first half of its financial year 2015, as it saw its net profit jump by 64% (to an EPS of $0.125). This included a one-time tax benefit, but corrected for this benefit, the profit coming from continuous operations increased by more than 20% (to $0.09/share).

Because of this excellent performance, the company has announced a 25% dividend increase to A$0.10/share for the first half of the financial year, but more importantly, it has announced a special dividend of $0.215/share. Both dividends will be fully franked, meaning that investors get a preferred dividend withholding tax rate (or don't have any withholding tax at all, depending on your situation). However, Tabcorp plans to raise capital through a 1-for-12 rights issue to cover the payment of the special dividend, and this is quite unusual. The company states it wants to maintain its balance sheet… Read More …