Australian Foundation Investment Company (AFI) H2 2026 earnings summary

Executive summary

• Focus remains on long-term investment in quality Australian and New Zealand companies with sustainable competitive advantages, strong balance sheets, and quality management.

• Largest listed investment company on the ASX with approximately 150,000 shareholders and a low-cost structure.

• Long-term objective is to deliver stable to growing fully franked dividends and attractive total returns.

• Maintains a diversified portfolio with a history of outperforming the S&P/ASX 200 Accumulation Index over 25 years.

• Portfolio performance has lagged the benchmark recently, but the company maintains a disciplined, long-term investment approach.

Financial highlights

• Profit for FY2026 was $293.5 million, up from $285.0 million in FY2025, aided by higher dividends from key holdings and reduced costs.

• Management expense ratio improved to 0.14% from 0.16% year-over-year.

• Fully franked dividends per share totaled 31.5 cents, including a 2.5 cent special dividend.

• Portfolio value decreased from $10.5 billion to $9.8 billion, mainly due to dividends paid, tax, and expenses.

• Share buybacks totaled $243 million during the year, with 35.4 million shares repurchased.

Outlook and guidance

• Directors will consider further capital management initiatives, including special dividends, with updates expected at the AGM.

• Australian share market is viewed as moderately expensive, with a price-to-earnings ratio above the long-term average and dividend yield below average.

• Focus remains on maintaining a diversified portfolio across key sectors to ensure solid dividend income.

• Strategy includes stepping into market volatility and maintaining a long-term quality focus.