Djerriwarrh Investments (DJW) H1 2025 earnings summary

Executive summary

• Net operating result for the half-year was AUD 21 million, down 4% from AUD 21.9 million, reflecting lower dividend and option income but offset by higher deposit revenue and lower finance expenses.

• Statutory profit for the half-year was AUD 21.4 million, up 67% from AUD 12.8 million, driven by net unrealised gains on open option positions.

• Interim dividend maintained at 7.25 cents per share fully franked, with a grossed-up yield of 6.4%, 1.9 percentage points above the S&P/ASX 200 Index.

• Portfolio return for the six months was 4.4% including franking, underperforming the S&P/ASX 200 Accumulation Index return of 7.6% due to underweight banking sector and higher cash position.

• Defensive positioning maintained with high call option coverage (41%) and significant net cash, reflecting caution amid high market valuations.

Financial highlights

• Dividend and distribution income fell 8% to AUD 17.9 million; option income dropped 21% to AUD 7.5 million.

• Operating income declined 9% to AUD 26.3 million; finance costs fell 71% to AUD 0.8 million; administration costs rose 16% to AUD 2.1 million.

• Net operating result per share was 7.96 cents, down 5% year-over-year; basic earnings per share for the half-year were 8.14 cents, up from 4.90 cents.

• Net tangible assets per share before deferred tax were AUD 3.39 at 31 December 2024; share price at period end was AUD 3.23.

• Net cash inflow from operating activities was AUD 23.1 million, down from AUD 24.7 million in the prior period.

Outlook and guidance

• Portfolio positioned conservatively with 41% call option coverage and a net cash position to capitalize on future opportunities.

• Management expects portfolio dividend yield to remain at or above market average over the long term, with greater reliance on miners and industrials and less on banks.

• Option income yield expected to average 1.5%-2% going forward; high level of option income already secured for the second half of FY2025.

• Confident in ability to deliver on income and growth objectives despite current market valuations.