In my previous post, I mentioned NeraTel is selling its payment solution business (How Will Sale of NeraTel Payment Solution Business Impact Me). On 31st August 2016, NeraTel has officially announced it has completed the sale of its payment business to Ingenico Group.
The completion of sale announcement was made a month after NeraTel reported a 3.5% decline in gross profit from 15.9 million to 15.3 million YOY. The turnover for Payment Solutions business area has declined 52.1% ($6.5 million) YOY from $12.5 million to $6.0 million for the quarter and 44.3% ($10.3 million) YOY from $23.2 million to $12.9 million for 1H 2016.
Based on the 1 month stock chart, the stock price has climbed up 5.67%. With the completion of sale, shareholders can expect a special dividend. This should push the stock price slightly higher over the next few months.
Expecting a Special Dividend
Do note that the following is only my own estimation.
As of 2Q 2016, the total number of issued shares excluding treasury shares as at the end of the current financial period was 361,897,000 shares.
The gain in disposal of its payment solution business is estimated to be $71.5 million. If the gain is to be paid out to shareholders, I expect an estimated special dividend of S$0.20 per share. This will most likely be paid out in the 4th quarter of 2016.
Continue Holding NeraTel?
With the sale of the payment solution business, NeraTel will be a pure Telecommunication and Infrastructure play. As per 2Q 2016, the Telecommunication business seems to be doing well. Turnover in Q2 2016 increased 7.2% ($1.3 million) from $17.6 million to $18.9 million. The increase was mainly due to higher sales in the Middle East and Africa market.