FFI Holdings Boosts Profit and Declares First Interim Dividend in Years
FFI Holdings Limited reported a 7.5% rise in revenue and a 7.6% increase in net profit after tax for the half year ended December 31, 2024, alongside the declaration of a fully franked interim dividend.
- Revenue increased 7.5% to $30.2 million
- Net profit after tax rose 7.6% to $1.83 million
- Interim dividend declared at 10.0 cents per share, fully franked
- Finance costs rose due to investment property acquisitions
- Strong balance sheet with net tangible assets of $4.14 per share
Financial Performance Highlights
FFI Holdings Limited has delivered a solid half-year performance for the six months ended 31 December 2024, with revenue climbing 7.5% to $30.2 million and net profit after tax increasing 7.6% to $1.83 million. This growth reflects steady operational improvements, particularly in the company’s core food production segment.
Despite the positive earnings momentum, the company faced a notable rise in finance costs, with net interest expense increasing to $112,400 from a previous net interest benefit. This uptick is attributed to additional investments in property assets made during the last financial year, underscoring the company’s strategic focus on leveraging its property portfolio.
Operational and Segment Insights
The bakery and food operations segment remains the primary driver of growth, with sales up 7.7% to $29.4 million and net profit before tax rising 13.4% to $2.33 million. These results highlight the effectiveness of ongoing operational enhancements and the company’s ability to meet market demand.
Meanwhile, the property investment segment continues to contribute steady income, with rental revenue increasing 4.7% to $0.84 million. The valuation of investment properties remains stable at $26.3 million, reflecting a cautious but confident approach to asset management.
Dividend and Shareholder Returns
In a notable development, FFI Holdings has declared an interim dividend of 10.0 cents per share, fully franked at the company’s 30% tax rate. This marks a return to dividend payments after a nil interim dividend in the prior corresponding period, signaling management’s confidence in the company’s cash flow and financial stability.
The company has also recommenced its Dividend Reinvestment Plan (DRP) with a 5% discount and a price cap of $3.75 per share, offering shareholders a flexible option to increase their holdings.
Balance Sheet and Outlook
FFI Holdings maintains a robust financial position with net assets of $45.1 million and net tangible assets per share of $4.14, slightly up from $4.11 a year earlier. The company’s low debt levels and quality asset base provide a solid foundation for future growth initiatives.
Looking ahead, the board and management remain optimistic about the long-term outlook. They are focused on driving further operational efficiencies and pursuing growth opportunities, while carefully managing finance costs and capital investments.
Bottom Line?
FFI Holdings’ steady profit growth and reinstated dividend signal renewed confidence, but rising finance costs warrant close monitoring.
Questions in the middle?
- How will rising finance costs impact FFI’s profitability in the next reporting period?
- What specific initiatives is management pursuing to sustain operational improvements?
- Could the company’s property investment strategy expose it to market valuation risks?
