Australian Foundation Investment Company (AFIC), with a market cap of approximately $7.5 billion invested in Australian equities, has reported its 2019 interim financial results, which saw a 62.5 per cent growth in net profit to $250.3 million.
The company said the result was helped by a number of one-off factors, which included participation in the Rio Tinto and BHP off-market share buy-backs and the recognition of a dividend because of the Coles demerger from Westfarmers.
Also, an income from the trading portfolio stood at $4.2 million whereas in the corresponding period last year these portfolios incurred a loss of $6.6 million, the firm said.
AFIC declared final dividends of 10 per cent per share, unchanged, and a special dividend of eight per cent would distribute the proceeds of the company’s participation in the recent off-market share buy-backs.
At the same time, AFIC’s portfolio was down 6.4 per cent for the six months to 31 December, 2018 compared with the S&P/ASX 200 Accumulation Index which fell 6.2 per cent over the same period.
The company also said that over the period it disposed of AGL Energy, Washington H. Soul Pattinson and Perpetual while adding to its portfolio holdings in James Hardie Industries, Transurban Group, Adelaide Brighton, Reliance Worldwide, Woolworths Group and Sydney Airport.
As far as key themes were concerned, AFIC said that the significant correction in the market produced a more conducive environment for long term investing and valuations moved towards longer term averages.
“AFIC believes the current policy proposal from the Federal Opposition to end the refundability of franking credits more likely to significantly impact our investors who have a low income, and for them we believe it to be both inequitable and very unfair,” the firm said in a statement.