Australian Foundation Investment Company Limited (AFIC) has announced a fully franked dividend of AUD 0.12 per share for the half-year ending December 2024, accompanied by Dividend Reinvestment and Bonus Security Plans.
- Dividend of AUD 0.12 per share, fully franked at 30%
- Ex-dividend date set for 3 February 2025, payment on 25 February 2025
- Dividend Reinvestment Plan (DRP) and Bonus Security Plan (BSP) offered with no discount
- Currency options available for shareholders in AUD, NZD, and GBP
- DRP and BSP securities rank pari passu and have no minimum or maximum participation limits
Dividend Announcement Overview
Australian Foundation Investment Company Limited (ASX: AFI), one of Australia's leading listed investment companies, has declared an ordinary dividend of AUD 0.12 per share, fully franked at the corporate tax rate of 30%. This dividend relates to the six-month period ending 31 December 2024, reflecting AFIC's ongoing commitment to delivering steady income to its shareholders.
The dividend will go ex-dividend on 3 February 2025, with a record date of 4 February 2025, and payment scheduled for 25 February 2025. This timeline provides investors with clarity on when to expect the income and the opportunity to participate in the dividend through various plans.
Dividend Reinvestment and Bonus Security Plans
AFIC continues to offer both a Dividend Reinvestment Plan (DRP) and a Bonus Security Plan (BSP), allowing shareholders to reinvest their dividends into additional shares rather than receiving cash payments. Notably, both plans are offered without any discount on the share price, which will be calculated based on the volume weighted average price (VWAP) of AFI shares traded over the five trading days following the ex-dividend date.
The DRP and BSP securities will be newly issued and rank pari passu with existing shares, ensuring equal rights and entitlements. There are no minimum or maximum limits on participation, providing flexibility for shareholders of all sizes. The deadline for election notices to participate in these plans is 5 February 2025 at 5:00 pm.
Currency Options and Shareholder Flexibility
AFIC has also confirmed arrangements for dividend payments in multiple currencies to accommodate its diverse shareholder base. Shareholders resident in New Zealand will receive dividends converted to NZD, while those in the UK and associated territories will receive GBP. All other shareholders will receive payments in AUD by default, although shareholders can elect to receive dividends in AUD, NZD, or GBP by providing relevant financial institution details.
This multi-currency approach reflects AFIC's recognition of its international investor base and enhances convenience and potential currency risk management for shareholders.
Implications for Investors
The fully franked nature of the dividend is particularly attractive for Australian resident investors, as it provides a tax credit that can offset their tax liabilities. The steady dividend payment underscores AFIC's stable earnings and cash flow generation, which is reassuring amid broader market uncertainties.
Investors considering participation in the DRP or BSP should evaluate the lack of a discount and the timing of share price determination, which may influence the attractiveness of reinvestment versus cash payment. The absence of minimum or maximum participation limits also makes these plans accessible to a broad range of shareholders.
Bottom Line?
AFIC’s consistent fully franked dividend and flexible reinvestment options reinforce its appeal as a reliable income investment, but investors will watch closely how market conditions affect share price and reinvestment value.
Questions in the middle?
- How will AFIC’s dividend policy evolve amid changing market conditions in 2025?
- What impact will the absence of a DRP discount have on shareholder participation rates?
- Could currency fluctuations influence the attractiveness of dividend payments in NZD or GBP?