MELBOURNE: Australian Foundation Investment Company (AFIC) has announced a fully franked special dividend of 5 cents per share alongside its final dividend, despite posting a slight decline in profit for the fiscal year ended June 30.
AFIC reported a net profit of A$285.0 million, down 3.9% from A$296.4 million a year earlier. Revenue from operating activities slipped 1.9% to A$328.1 million. The investment company attributed the decline largely to reduced dividends following portfolio adjustments, including a strategic trimming of its Commonwealth Bank of Australia holdings.
The special dividend reflects capital gains and franking credits from those reductions and will be paid on August 28, together with the final dividend of 14.5 cents per share. Total dividends for the year climbed to 31.5 cents per share, up 21.2% from last year.
“The special dividend highlights our ability to generate tax-effective outcomes for shareholders while remaining disciplined in managing valuations,” Managing Director Mark Freeman said during a shareholder briefing.
AFIC’s portfolio returned 10.7% over the financial year, underperforming the S&P/ASX 200 Accumulation Index’s 15.1% return, largely due to the company’s lack of exposure to gold and underperformance from select holdings such as ARB Corporation and CSL.
The board also initiated positions in BlueScope Steel, Telix Pharmaceuticals, Sigma Healthcare, and Worley, signaling confidence in long-term growth sectors such as diagnostics and industrial engineering.
Shareholders can participate in the Dividend Reinvestment Plan (DRP) or Dividend Substitution Share Plan (DSSP) through August 7.
AFIC’s Annual General Meeting is scheduled for September 30.