Future Generation Australia has raised its fully franked interim dividend for the tenth consecutive year, underpinned by a robust 10.8% investment portfolio return over the past 12 months.
- 10.8% 12-month portfolio performance to June 2025
- 3.6 cents per share fully franked interim dividend declared
- Annualised dividend yield of 5.5%, grossed-up yield of 7.9%
- Operating profit after tax of $13.3 million
- Social investments total $49 million since inception
Consistent Dividend Growth Amid Market Uncertainty
Future Generation Australia Limited (ASX, FGX) has announced a fully franked interim dividend of 3.6 cents per share, marking the tenth consecutive annual increase. This decision reflects the company’s confidence in its long-term investment portfolio, which delivered a solid 10.8% return over the 12 months ending 30 June 2025. The dividend translates to an annualised yield of 5.5%, or 7.9% when grossed up to include franking credits, offering shareholders a reliable income stream in a challenging macroeconomic environment.
Outperformance with Lower Risk
The investment portfolio’s performance notably outpaced the S&P/ASX All Ordinaries Accumulation Index and the Small Ordinaries Accumulation Index, while maintaining lower volatility. This achievement is attributed to the company’s unique investment model, which leverages pro bono fund managers who waive their fees, allowing for cost efficiencies and enhanced returns. The portfolio’s strategic tilt towards small, mid, and micro-cap Australian companies has been a key driver of this outperformance, despite recent market gains being led by large-cap stocks.
Strong Financial Results and Social Impact
Future Generation Australia reported an operating profit before tax of $19.0 million and an after-tax profit of $13.3 million for the period. Beyond financial returns, the company continues its commitment to social impact, delivering $5.7 million in social investments this year alone. Since inception, these contributions have reached $49 million, supporting children and youth at risk through its social impact partners. This dual focus on financial performance and social responsibility remains a defining feature of the company’s strategy.
Looking Ahead
With the dividend reinvestment plan operating without a discount, shareholders have the opportunity to compound their investment in Future Generation Australia. The company’s leadership emphasizes the sustainability of its income stream and the resilience of its investment approach amid ongoing market volatility. As the company approaches its eleventh year of consecutive dividend increases, investors will be watching closely to see if this trend continues in the face of evolving economic conditions.
Bottom Line?
Future Generation Australia’s blend of strong returns and social commitment positions it well, but sustaining this momentum will be key amid uncertain markets.
Questions in the middle?
- Will Future Generation Australia maintain its dividend growth streak beyond 2025?
- How will shifts in small and mid-cap markets affect the portfolio’s performance?
- What impact will ongoing macroeconomic uncertainty have on social investment commitments?