Carlton Investments increased FY2026 profit and fully franked dividends, but its investment portfolio underperformed sharply as its largest holding, EVT, fell 22.6% in value. The company’s total portfolio return was negative 3.2%, compared with a 6.1% gain for the S&P/ASX 200 Accumulation Index.
- Net profit rose 6.1% to $41.18 million
- Ordinary dividends reached 120 cents per share, including a 2-cent special dividend
- Portfolio fair value fell 6.2% to $1.189 billion
- EVT holding declined 22.6% and represented 33.36% of the portfolio
- Total portfolio return lagged the benchmark by 9.3 percentage points
Profit and Dividends Move Higher
Carlton Investments Limited (ASX:CIN) delivered the sort of earnings result income-focused shareholders will recognise: profit rose, distributions increased and the fully franked dividend was lifted. Net profit for the year ended 30 June 2026 increased 6.1% to $41.18 million, while dividends and distributions received climbed 7.5% to $43.40 million.
The directors declared a final fully franked ordinary dividend of 71 cents per share, plus a 2-cent special dividend. Combined with the 47-cent interim payment, ordinary dividends for the year reached 120 cents per share, up from 113 cents in FY2025. A fully franked 7-cent final dividend is also payable on each preference share, while the dividend reinvestment plan remains suspended.
EVT Concentration Drives Portfolio Loss
The stronger income statement sits alongside a much weaker investment performance. Carlton’s equity portfolio fell 6.2% in fair value, to $1.189 billion, after adjusting for acquisitions and disposals. Its total portfolio return, measured through the movement in net tangible asset backing per share with dividends reinvested, was negative 3.2%.
The comparison with the market was unfavourable: the S&P/ASX 200 Accumulation Index gained 6.1% over the same period. Carlton identified its 18.9% holding in EVT Limited as the dominant drag. EVT’s value fell 22.6% during the year to $396.5 million, representing 33.36% of Carlton’s listed equity portfolio. Excluding EVT, the portfolio’s fair value increased 4.9%, according to the report.
Selective Buying and a Smaller Share Count
Carlton invested $13.89 million in Australian-listed equities during the year, compared with $21.09 million in FY2025. Purchases above $1 million included AGL Energy, Super Retail Group, Telstra Group, Elders, Santos, Bendigo and Adelaide Bank, Rio Tinto, Harvey Norman Holdings, Sonic Healthcare and Westpac Banking Corporation.
The company also bought back 51,360 ordinary shares for $1.79 million under its on-market program. Its issued ordinary share count fell to 26.34 million at year-end. Cash and term deposits totalled $17.29 million, providing a modest liquidity buffer against the portfolio’s much larger market exposure.
NTA Falls Despite Higher Earnings
Net tangible asset backing before provision for tax on unrealised gains declined to $45.82 per ordinary share from $48.39 a year earlier. After provision for tax on unrealised capital gains, the figure was $38.00, down from $39.52. The balance sheet makes the reason clear: listed equities accounted for 98.3% of total assets, leaving Carlton highly exposed to movements in its concentrated portfolio even as dividend income remains resilient.
The board expects Australian equity markets to remain volatile while inflation stays outside the Reserve Bank’s target range. It says Carlton will maintain a cautious, long-term approach centred on companies capable of producing predominantly fully franked income and capital growth. The next test is whether that income model can continue to offset the effect of EVT and other lagging holdings on NTA performance.
Bottom Line?
Carlton’s income engine is still producing higher profit and dividends, but the year exposed the cost of concentrated equity exposure. Future results will turn heavily on whether EVT stabilises and whether new purchases can narrow the performance gap to the broader market.
Questions in the middle?
- Can EVT recover sufficiently to reduce its outsized drag on Carlton’s NTA?
- Will higher dividends continue if portfolio companies face weaker earnings or payout capacity?
- Does Carlton’s cautious buying approach change materially after a year of benchmark underperformance?