Djerriwarrh Investments (DJW) investor relations material

Executive summary

• Net operating result rose to $40.8M, with per share result at 15.50¢, and fully franked dividend per share increased to 15.5¢, up from 15.25¢.

• Achieved a 6.5% dividend yield (grossed up for franking credits) versus the market's 4.2%, and a 7.3% yield on share price due to trading at a discount to NTA.

• Total return for the year was 7.8%, lagging the market's 15.1%, attributed to defensive positioning and option strategy.

• Management expense ratio increased to 0.47% from 0.42%, mainly due to lower gearing.

• Portfolio underperformed the ASX 200, mainly due to underweighting CBA and overweighting CSL, but positive contributions came from Telstra and Newmont.

Financial highlights

• Net operating result rose to $40.8M from $40.3M, excluding open options positions.

• Dividend income fell 4% to $34.7M, offset by a 1% increase in option income to $16.7M and higher deposit income.

• Total dividends for the year increased to 15.5¢ per share, fully covered by net operating profit.

• Net tangible assets per share at June 30 was $3.40; share price was $3.03, a 7% discount.

• Operating earnings per share reached 15.50¢, with net profit after tax at $39.2M.

Outlook and guidance

• Market viewed as expensive on valuation metrics; portfolio remains defensively positioned with significant capacity to invest on market pullbacks.

• Expectation of solid fully franked dividend income from major miners and ability to maintain or grow dividends depends on finding quality companies at attractive prices.

• Option income for the next year is well positioned, with flexibility to write more as opportunities arise.

• Focus remains on a diversified portfolio of high-quality companies for long-term income and growth.