Australian Foundation Investment Company (AFI) H1 2025 earnings summary

Executive summary

• Largest listed investment company on the ASX, 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 have historically been less volatile than the index.

• 160,000 shareholders and an independent board.

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 $8.24 as of 31 December 2024.

• Management expense ratio at 0.15%, slightly up from 0.14% due to one-off costs.

Outlook and guidance

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

• Domestic economic growth is moderating, with subdued sales growth and persistent cost inflation.

• High market valuations (forward PE at 17.6x, 20% above 20-year average) suggest returns may take longer to materialize.

• Focus remains on holding quality companies with strong balance sheets and long-term growth prospects.

• Cautious capital allocation strategy maintained.