Future Generation Australia (FGX) H1 2025 earnings summary

Executive summary

• Achieved strong investment performance despite challenging market conditions, with a 4.9% portfolio increase in July and 11.3% over 12 months, outperforming key indices.

• Interim dividend increased for the tenth consecutive year, now at 3.6 cents per share, reflecting confidence in portfolio performance and structure.

• Operating profit before tax reached $19.0 million, with after-tax profit at $13.3 million for the half year ended 30 June 2025, down from $29.6 million and $23.3 million respectively in HY2024.

• Social impact investment of $5.7 million to be made in 2025, bringing total since inception to $49.0 million, with a strategic shift to support vulnerable children aged 0–14.

• Portfolio is diversified across 17 leading Australian fund managers, with a bias toward small, mid, and micro-cap companies.

Financial highlights

• Annualised fully franked interim dividend of 7.2 cents per share for FY2025, with a yield of 5.5% based on the 8 September 2025 share price of $1.315 per share.

• Grossed-up dividend yield, including franking credits, stands at 7.9% based on a 30% tax rate.

• 12-month investment portfolio performance reported at +11.3% before expenses, fees, and taxes as of 31 July 2025.

• NTA before tax at 30 June 2025 was $1.39 per share; after tax, $1.34 per share.

• Profit reserve stands at $0.42 per share, providing nearly six years of dividend coverage at current payout rates.

Outlook and guidance

• Board declared an increased fully franked interim dividend of 3.6 cents per share, annualized yield of 5.9% (grossed-up 8.4%) on 30 June 2025 share price.

• Portfolio is well positioned due to diversification, active management, and a strong investment committee, with a focus on long-term outperformance through small, mid, and micro-cap companies.

• Company maintains 5.8 years of dividend coverage based on profits reserve.

• Anticipates continued strong dividend payments, supported by robust profit and franking reserves.

• Small and mid-cap stocks expected to continue outperforming large caps, with materials and quality industrials highlighted as key sectors.