In early stage companies there is often a call by founding directors and shareholders for dividends, particularly after they have been through a long and difficult period as LOQ has. Their cry is 'Look at what we've sacrificed to pull us through, isn't it about time we started seeing some benefit?' The easy way to do it is to declare a dividend, which benefits larger shareholders at the expense of the company's cash balance.
Personally I think LOQ would be well advised to put another year or two of growth under its belt, to prove this one was no fluke, and only then start thinking about dividends. A strong cash position significantly reduces the risk in the company – they can deal with emergencies such as product recalls/upgrades or patent attacks – and improves their ability to respond rapidly and effectively to opportunities as they arise – for instance implementing a new park quickly and without recourse to leasing arrangements.
No sensible investor is against dividends in principle, but they're certainly not the reason most of us invest in startup companies – capital growth is far more important. When LOQ has begun to fulfil the promise of the AIM launch then it will be time to start thinking of dividends.
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