Australian Foundation Investment Company (AFI) H2 2024 earnings summary

Executive summary

• Portfolio delivered a 15.1% return including franking, outperforming the ASX 200's 13.5% for the year and maintaining a long-term record of stable, growing fully franked dividends.

• Largest listed investment company on the ASX with 160,000 shareholders and an independent board.

• Focuses on long-term investment in Australian and New Zealand companies, aiming for stable to growing fully franked dividends.

• Management expense ratio remains low at 0.15%, with no performance fees, supporting cost efficiency for shareholders.

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

Financial highlights

• Net profit for FY2024 was AUD 296.4 million, down from AUD 310.2 million in FY2023, mainly due to lower dividends from the resources sector.

• Dividend increased by 4% for the year, with a final fully franked dividend of AUD 0.26 per share, up from AUD 0.25 last year.

• Portfolio return of 15.1% (including franking) exceeded the ASX 200's 13.5%.

• Five-year annualized portfolio return of 9.3% versus the ASX 200's 8.7%.

• NTA per share at 30 June 2024 was AUD 7.88; share price was AUD 7.15, trading at a 9% discount to NTA.

Outlook and guidance

• Domestic economic growth has moderated, with slowing consumer spending and a challenging earnings environment.

• Interest rates are near the end of the rising cycle, and inflation appears to have peaked.

• Expectation for market return drivers to broaden beyond financials and IT, with focus on companies positioned for long-term value.

• Portfolio remains focused on well-managed companies with strong balance sheets and strategic assets.