DJW – Djerriwarrh Investments | Aussie Stock Forums

Final dividend is 5.25 cents per share fully franked, down from 10 cents last year, and in accordance with the more flexible approach to dividends, as outlined to shareholders at the last half-year announcement.

Net Operating Result (which excludes the impact of open option positions and is therefore a better measure of the Company’s income from its investment activities) was $28.1 million, down 25.5% from $37.6 million in the prior corresponding period because of the decline in dividends received.

Dividend income for the financial year, particularly in the second half, was impacted by the deferment and reduction in the dividend of three of four major banks and reduced dividends from Alumina, Sydney Airport and James Hardie Industries. In addition, last year’s figure included special dividends from BHP, Wesfarmers and Mirrabooka Investments, none of which were repeated this financial year.

Portfolio Adjustments
The key focus for Djerriwarrh over the last 12 months has been to reinforce the overall quality of the companies within the portfolio, while maintaining a suitable balance between short term income yield and long term growth in capital and income. The number of holdings in the portfolio was reduced from 59 to 49 over the 12-month period to narrow the focus of the portfolio to better quality companies, many of which have the capacity to grow their dividends into the future.

Major sales for the 12-month period were predominantly as a result of the exercise of call options. This included positions in CSL and Wesfarmers, and Commonwealth Bank and National Australia Bank early in the first half of the year, before bank share prices came under pressure. There was also some reduction in the holding of James Hardie Industries, which remains a large position in the portfolio. Holdings exited through the year included AUB Group, Ansell, Worley and Treasury Wine Estates.

Purchases in the portfolio in the year were because of the desire to rebuild positions where stocks were sold as a result of the exercise of call options, participation in discounted capital raisings and to take advantage of weakness in shares prices as markets capitulated in March and April as the fallout of COVID-19 was at its peak. New companies added to the portfolio through the 12-month period were Auckland International Airport, InvoCare, BWP Trust (a REIT exposed predominantly to Bunnings Warehouse), ARB Corporation and ASX.

(don’t hold; sold 3 years ago)