Perpetual Equity Posts $20.4M NPAT, Holds 4.0 cps Fully Franked Dividend

Solid Financial Performance Amid Market Challenges

Perpetual Equity Investment Company Limited (ASX: PIC) has announced a significant uplift in its financial results for the half year ended 31 December 2025. The company reported a net operating profit after tax (NPAT) of $20.4 million, marking a $14.4 million increase compared to the same period last year. This strong profit growth underscores the effectiveness of the company's disciplined investment approach during a period characterised by macroeconomic volatility and geopolitical tensions.

Despite these challenges, Perpetual Equity has maintained its fully franked interim dividend at 4.0 cents per share, consistent with the previous financial year’s interim and final dividends. This payout translates to an attractive annual dividend yield of 6.4%, or 9.1% when grossed up to include franking credits, significantly outperforming the S&P/ASX 300 Accumulation Index dividend yield of 3% as of 31 December 2025.

Strong Dividend Coverage and Income Reliability

The company’s robust profit reserve of $68.4 million and franking account balance of $13.3 million provide solid backing for future dividend payments. These reserves equate to 2.2 years and 1 year of dividend coverage respectively, after accounting for the interim dividend payment. Chairman Nancy Fox emphasised the board’s commitment to managing these reserves prudently to ensure a consistent and reliable income stream for shareholders over the long term.

“Our strategy continues to underpin the delivery of fully franked dividends despite ongoing inflationary pressures and global uncertainties,” Fox said. The company’s approach reflects a cautious optimism, balancing income stability with the need to navigate evolving market conditions.

Investment Portfolio Outperformance

Perpetual Equity’s investment portfolio returned 5.5% for the half-year, outperforming its benchmark; the S&P/ASX 300 Accumulation Index; by 1.5%. Portfolio managers Vince Pezzullo and Sean Roger highlighted the dynamic market environment shaped by an AI-driven technology cycle, commodity strength, and divergent global monetary policies. They noted a recent shift in market leadership from financials and technology sectors towards resources and cyclicals, a trend that aligns well with their fundamentals-based investment process.

“We continue to seek opportunities where companies are mispriced by the market but offer long-term upside potential, all while prioritising capital preservation,” Roger explained. This disciplined approach appears to have served the company well in the face of structural changes and geopolitical shocks.

Looking Ahead

With a solid balance sheet and a proven investment strategy, Perpetual Equity is well positioned to maintain its dividend policy and navigate the uncertainties ahead. The company’s next key dates include the ex-dividend date on 12 March 2026 and the payment date on 9 April 2026, milestones that investors will watch closely.