Deterra Royalties shares tumble on UK acquisition, dividend plan
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The news: Shares in Deterra Royalties have tumbled in early trading after the mining royalties group late on Thursday announced plans for a UK acquisition and said it would halve its dividend payout ratio from next year.
The numbers: Deterra said it has made an all-cash offer to buy UK-listed Trident Royalties for $276 million, and will use part of its existing $500 million of undrawn debt facilities for this purpose.
It also outlined a dividend payout of 100% of its FY24 net profit after tax, but said it will target a 50% payout from FY25 onwards.
Deterra shares were down 6.5% to $4.17 on the news in early trading on the ASX.
The context: Deterra managing director Julian Andrews said the lower payout would better align dividends with its “targeted longer-term balance between capital growth and income returns".
The company also said its board would unanimously recommend the Trident deal and had already secured commitments from more than a quarter of Trident shareholders. It said the British company would provide exposure to precious and battery metals.
Trident has a heavy exposure to lithium thanks to owning a royalty stream over the large Thacker Pass lithium deposit in the US.
The sources: ASX announcement, ASX announcement
