Djerriwarrh Investments (DJW) H1 2026 earnings summary

Executive summary

• Focus remains on delivering an enhanced, fully franked dividend yield above the market, with a 6.6% yield on net asset backing and 7.1% on share price as of December 31, 2025.

• Net operating result for the half-year was AUD 19.7 million, down 6% year-over-year, reflecting lower dividend and distribution income and option activity.

• Portfolio underperformed the ASX 200/S&P ASX200 Index by 6% in 2025, mainly due to specific large and small-cap holdings and lack of exposure to surging gold stocks.

• Portfolio remains defensively positioned, with increased investments in high-quality income and growth companies and reduced reliance on major banks.

• Transitioning to quarterly dividend payments from May 2026 to enhance shareholder value, subject to board approval.

Financial highlights

• Net operating profit for the half-year was AUD 19.7 million, down 6% year-over-year, mainly due to an 8% decline in dividend and distribution income.

• Option income remained flat at AUD 7.5 million, contributing a 1.7% yield on portfolio value.

• Management expense ratio improved to 0.38%, aligning with historical averages.

• Dividend maintained at AUD 0.0725 per share, fully covered by net operating profit.

• Net tangible assets per share before tax as at 31 December 2025 were AUD 3.35; share price was AUD 3.12, a 7% discount.

Outlook and guidance

• Market viewed as moderately expensive; portfolio remains defensively positioned but selectively invests in high-quality opportunities.

• Dividend and option income expected to remain robust, with flexibility to write more option premium in the second half of FY2026.

• Dividend income now more reliant on miners and industrials, less on major banks.

• Ongoing focus on closing the share price discount to net tangible asset backing through marketing, buybacks, and dividend policy changes.

• Ongoing focus on high-quality, diversified holdings to balance income and growth amid economic and geopolitical uncertainties.