Perpetual Equity Investment Company (PIC) H2 2024 earnings summary

Executive summary

• Net profit after tax for FY24 was $28.6 million, down 48% year-over-year due to softer investment performance, but a strong recovery in 2H24 outperformed the benchmark by 5%.

• FY24 fully franked dividend totaled 8.0 cents per share, the highest annual dividend paid, with a yield of 6.5% and grossed-up yield of 9.3%.

• Profit reserve stands at $82.5 million, providing 2.7 years of dividend coverage; franking account balance is $12.7 million.

• The investment portfolio returned 7.7% for the year, underperforming the S&P/ASX 300 Accumulation Index (11.9%), but delivered 10.4% p.a. over five years, outperforming the benchmark by 3.2% p.a.

Financial highlights

• Revenue from investment income was $43.6 million, down from $81.1 million in FY23.

• Earnings per share were 7.53 cents, compared to 14.58 cents in FY23.

• Net tangible assets after tax were $1.272 per share, a slight decrease from $1.277 per share last year.

• Total assets at year-end were $503.1 million; net assets were $483.6 million.

• Cash and cash equivalents at year-end were $11.8 million, down from $36.6 million.

Outlook and guidance

• The portfolio is positioned for quality businesses at reasonable valuations, expecting a global rotation away from growth stocks.

• Anticipates benefits from potential interest rate cuts and signs of recovery in China, with continued focus on long-term themes like renewable energy.