Venture

Venture - Counter is down 0.14% today, hardly a surprise, with the counter having been range bound after it reported a dismal set of results in May, which saw weak financial performance across most segments, exacerbated by higher income tax expense and lower contributions from associates. Going forward, management notes that the operating environment for the global electronics industry remains challenging with no clear signs of recovery in the near term. The group aims to sharpen its focus on increasing market share and win new programs and customers, while considering strategic investments to meet longer-term goals. Nevertheless, with a net cash position of $294.1m ($1.07 cash / share), Venture’s balance sheet remains sturdy, which should enable the group to ride out the current storm. However, with a dividend payout at almost 100% and capex doubling to at least $68m in FY13, it may be difficult for Venture to sustain its DPS of 50¢, hence putting its attractive 6.5% yield under pressure.