• Net operating profit after tax of $108.4 million
• A fully franked final dividend of 2.8 cents per share, with a total dividend for FY21 of 5.6 cents per share fully franked
• Annual dividend yield of 4.3% and a grossed up dividend yield of 6.2%^[1]
• Investment portfolio performance of 42.4%, outperforming the benchmark by 13.9% for the 12 months to 30 June 2021^[2]
• Successful capital raising in excess of $30 million
• Net Tangible Assets (NTA) after tax per share of $1.299 as of 30 June 2021s^[3]
• Total shareholder return was 51.2%^[4], outperforming the benchmark by 22.7%

The Perpetual Equity Investment Company Limited (ASX:PIC; the Company) has announced its annual results for financial year 2021 (FY21), posting a net operating profit after tax (NPAT) of $108.4 million, and an operating profit before tax of $152.9 million. This represents a record financial year profit for the Company since listing on the ASX in 2014.

The Board has declared a fully franked final dividend of 2.8 cents per share, bringing the total dividend for FY21 to 5.6 cents per share fully franked. This is reflective of the Company’s commitment to deliver income to shareholders and equates to an annual dividend yield of 4.3% and a grossed up dividend yield of 6.2%^[1].

Chairman Nancy Fox said, “The Board is delighted with the strong results the Company has delivered in FY21, including a record profit, solid portfolio outperformance^[2] and total shareholder return above the benchmark^[4]. Despite the current environment remaining uncertain due to the impacts of COVID-19, we have continued to provide a reliable income stream to our shareholders. This is attributable to the prudent management of the Company which has enabled the Board to deliver a fully franked total dividend of 5.6 cents per share this year.”

The final dividend will be paid on 20 October 2021. The dividend reinvestment plan (DRP) is available to shareholders for the final dividend. The last election date for the DRP is 30 September 2021 and the record date for the dividend is 29 September 2021.

“The Board also remains very encouraged by the strong support received from our eligible shareholders who participated in the Company’s Share Purchase Plan (SPP) in June, which raised over $30 million. The proceeds have enabled the Manager to actively pursue additional investments in line with the Company’s investment strategy. We believe the SPP and bonus issue of Options have provided all eligible PIC shareholders with the opportunity to participate in the potential growth of the Company, which we believe will benefit all shareholders,” Ms Fox commented.

PIC performance and market conditions

The PIC portfolio delivered a return of 42.4% for the 12 months to 30 June 2021, outperforming its benchmark by 13.9%^[5] . As at 30 June 2021, the portfolio held 72.5% in Australian listed securities, 20.5% in global listed securities and 7.0% in cash. The higher cash allocation compared to the preceding months leading up to 30 June was partly a result of receiving proceeds from the Company’s SPP of around $30 million on 23 June 20216 . PIC Portfolio Manager Vince Pezzullo said, “We were pleased to outperform the benchmark by almost 14%5 over FY21^[6].

This is reflective of our active investment approach and intensive company research which enables us to adapt to changing market conditions and adjust the portfolio quickly. The market volatility led by COVID-19 provided opportunities to invest in companies with strong balance sheets which we believed were undervalued and would benefit as economies reopened. As global markets moved through the recovery cycle and economies began to reopen, we saw the benefits of our continued focus on quality and value realised. In addition, our flexible investment strategy including the ability to invest up to 35% in global listed securities also contributed to outperformance over the period.”

Nancy Fox said, “The Board is committed to delivering on the Company’s investment objective of providing income and long-term capital growth to shareholders. The market volatility over the last 18 months in particular has demonstrated the importance of prudent capital management and active investment management. At this time, we believe consolidating on the Company’s strong FY21 result by retaining more capital for investment and continuing to build a healthy franking account balance, positions the Company well to continue to provide returns to shareholders over the long-term.”

2021 Annual Shareholder Presentation

The Board extends an invitation to all shareholders and interested parties to attend the 2021 Annual Shareholder Presentation on 21 October 2021.

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[1] Yield is calculated based on the total grossed up dividends of 8.0 cents per share (taking franking credits into account) and the closing share price of $1.30 as at 30 June 2021.
[2] The benchmark is the S&P/ASX 300 Accumulation Index. Returns have been calculated on the growth of NTA after taking into account all operating expenses (including management fees) and assuming reinvestment of dividends and excluding tax paid. Any provisions for deferred tax on unrealised gains and losses are excluded. Past performance is not indicative of future performance.
[3] ‘After tax’ refers to tax paid and provisions for deferred tax on unrealised gains and losses in the Company’s investment portfolio.
[4] Total shareholder return for the 12 months to 30 June 2021. Source: FactSet; Performance presented in AUD, based on the ASX share price assuming reinvestment of dividends on the ex-date.
[5] The benchmark is the S&P/ASX 300 Accumulation Index. Returns have been calculated on the growth of NTA after taking into account all operating expenses (including management fees) and assuming reinvestment of dividends and excluding tax paid. Any provisions for deferred tax on unrealised gains and losses are excluded. Past performance is not indicative of future performance.
[6] Full details of the outcome of the SPP were announced to the ASX on 21 June 2021.

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Vince Pezzullo

1H18 profit; delivers increased returns to shareholders

1H18 Highlights:

• Strong operating profit after tax of $20.7m
• A fully-franked interim dividend of 3.0 cents per share, a 36% increase on 1H17
• Investment portfolio performance for the 6 months to 31 December 2017 was 10.4%, outperforming the benchmark by 1.8%[1]
• The Net Tangible Asset backing per share was $1.153 after tax2 as at 31 December 2017

The Perpetual Equity Investment Company Limited (ASX:PIC) has announced a strong result for the six months to 31 December 2017, with operating profit before tax of $28.4 million and operating profit after tax of $20.7 million.

The PIC Board also announced a fully franked interim dividend of 3.0 cents per share, a 36% per cent increase on 1H17, highlighting the strong financial position of the company. The dividend will be paid on 11 April 2018.

PIC Chairman Nancy Fox said: “The Board is pleased to once again announce an increased interim dividend. It is in line with our objective to pay a sustainable income stream for our investors, and importantly, is a result of the way we have prudently managed the company since its listing.

“The Company has a healthy profit reserve which combined with the franking account balance puts it in a good position to continue to meet this objective.”

The fully franked interim dividend will provide shareholders with an annual dividend yield of 5.0% and a gross dividend yield (taking franking credits into account) of 7.2%3.

The dividend reinvestment plan (DRP) is available to shareholders for the interim dividend. The plan will operate at a 2.5% discount. The last election date for the DRP will be 22 March 2018.

PIC performance and recent market volatility

The PIC portfolio performed strongly for the six months to 31 December 2017, returning 10.4%, outperforming the benchmark by 1.8%1. As at 31 December 2017, the portfolio held 66% in Australian listed securities, 19% in global listed securities and 15% in cash.

Commenting on recent market volatility, PIC Portfolio Manager Vince Pezzullo said: “The sudden surge in market volatility has highlighted that many asset prices have been artificially inflated by trillions of dollars in monetary stimulus and ultra-low interest rates as central banks have tried to reignite sluggish economies.

“As a value investor volatility can provide increased opportunities to buy companies at attractive valuations. We have remained disciplined and maintained appropriate cash reserves, which not only provides a buffer to a market downturn, but also gives us the opportunity to move quickly and purchase stocks that meet our quality filters.

“We will continue to focus on finding companies with sound management, conservative debt levels, a strong business and recurring earnings that we believe are undervalued by the market. This patient approach allows us to find both local and global businesses that deliver strong returns for the portfolio,” said Mr Pezzullo.

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• Strong growth in net profit after tax (NPAT) of $31.8 million – up 318% on FY16
• Final dividend of 2.5 cents per share fully franked, bringing total dividends declared for FY17 to 4.7 cents per share fully franked – a 68% increase on FY16
• Investment return of 17.4%, outperforming the benchmark return by 3.6% net of management fees and operating expenses1

Vince Pezzullo

Investors will be rewarded with an increased dividend after the Perpetual Equity Investment Company Limited (ASX:PIC) yesterday announced a $31.8 million net profit for the year ending 30 June 2017, a 318% increase on FY16.

The PIC Board declared a final dividend payment of 2.5 cents per share fully franked, bringing the total dividend payment for FY17 to 4.7 cents per share fully franked. This represents a 68% increase on the total dividend payment for FY16.

PIC Chairman Nancy Fox said: “The Board’s objective is to pay a regular dividend and we remain focused on achieving this for shareholders. The Board is pleased to announce [yesterday’s] dividend which is a reflection of the continued strong performance and increasing maturity of the company.”

Commenting on the 2017 financial year, Ms Fox said: “Market uncertainty appears to be the new normal. In this context it’s important to highlight PIC is backed by one of Australia’s most experienced fund managers, Perpetual Investments, with a track record of delivering consistent performance to investors for more than 50 years.”

The PIC portfolio delivered investors an increased dividend and strong growth, including an investment return after management fees and operating expenses of 17.4%, outperforming the benchmark return by 3.6%[1].

PIC portfolio manager Vince Pezzullo said: “The portfolio has delivered strong investment returns against a backdrop of market uncertainty. PIC’s key differentiator in the market – capacity to invest up to 25% of the portfolio in global equities – has the ability to enhance returns and better manage market risk.

“The Australian equity market provides a concentrated exposure to the Financials and Materials sectors. We believe it’s important to provide investors with genuine diversification outside of this and the opportunity to benefit in global growth sectors such as Healthcare and Information Technology,
which we have done throughout the year.

“Over the year the portfolio had an average global exposure of 18%, which is reflective of the opportunities we’ve identified abroad. Deutsche Boerse AG, ICON Plc and Bank of America Corporation are just three examples of global stocks that have contributed to performance.”

Continued discipline

PIC is managed by Perpetual Investments, with an investment philosophy and process focused on buying high quality companies at prices below what is perceived as true value.

“This process means we do not focus on trying to predict where markets and prices are heading. We make investment decisions based on in-depth research which allows us to understand the fundamental risks and opportunities of each company we own in the portfolio.”
“We remain committed to this approach which has proven beneficial for investors over the long-term.”

PIC is one of the few Listed Investment Companies in Australia to release its Net Tangible Assets (NTA) per share daily, ensuring our shareholders always have a current valuation of the investment portfolio. As at 30 June 2017, the value of the portfolio’s NTA per share was $1.097 after tax [2] .The NTA per share continues to grow and is $1.105 after tax [2] as at 17 August 2017.

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[1] Returns have been calculated on the growth of Net Tangible Assets (NTA) after taking into account all operating expenses (including management fees) and assuming reinvestment of dividends. Any tax paid and provisions for deferred tax on set up costs and on unrealised gains and losses are excluded. Past performance is not indicative of future performance. The benchmark is the S&P/ASX300 Accumulation Index.
[2] All figures are unaudited and approximate.

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