Why Venture's dividend sacrifice is genius move

DPS dipped to S$0.50 in FY12.

According to OCBC, surprisingly, VMS lowered its DPS from S$0.55 in FY11 to S$0.50 in FY12. However, this still represents a decent yield of 5.9%.

As VMS ended the Dec-quarter with a healthy net cash of S$286.0m, OCBC believes this move possibly reflects the higher capex and expansion plans of the group moving
forward.

VMS would complete the S$38m purchase of its Singapore headquarters in 1H13 (rental expected to spike up if lease is renewed upon expiry).

Here's more from OCBC:

There are also plans to further develop its Penang manufacturing site and new investments would be made in facility installations to support its customers. 

We believe this would place VMS in a stronger position to capture the expected uptrend in manufacturing outsourcing activities to the ASEAN region in the future, especially given the rising labour costs in China.

Hence, looking at the broader scheme of things, we believe that it is still a sound strategic move by VMS to sacrifice some dividends in the near term in exchange for longer-term growth.