Australian Foundation Investment Company (AFI) H1 2025 earnings summary

Executive summary

• Largest listed investment company on ASX with 160,000 shareholders, focused on long-term, low-turnover investing in quality Australian and New Zealand companies, with a small international allocation (1.4–1.6%).

• Management expense ratio remains low at 0.15% annualised, with no performance fees and internalized management.

• Emphasis on stable, growing fully franked dividends and attractive total returns over the medium to long term.

• Portfolio and share price returns are less volatile than the index, with a long history of dividend stability.

• Portfolio return for the half-year was 7.2% (including franking), slightly below the S&P/ASX 200 Accumulation Index at 7.6%.

Financial highlights

• Half-year profit was $154.2 million, up from $150.1 million in the prior year.

• Interim dividend increased to 12.0 cents per share, fully franked, up from 11.5 cents.

• Portfolio value rose to $10.4 billion from $9.5 billion at the previous year-end.

• Net tangible assets per share at 31 December 2024 were $8.24; share price was $7.41.

• Cash at period end was $294.1 million, up from $166.5 million at the start of the half-year.

Outlook and guidance

• Market volatility expected to persist due to geopolitical tensions, trade policy uncertainty, and upcoming elections.

• Domestic economic growth is moderating, with sales growth expected to slow amid persistent cost inflation.

• High market valuations suggest returns may take longer to materialize; ASX 200 trading at a forward PE of 17.6x, 20% above the 20-year average.

• Emphasis on maintaining a balanced portfolio and investing in quality companies with strong balance sheets and long-term value creation.