15 August 2022
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LMI Monthly update: July

Claire Aitchison
4 August 2022

LMI Market News

RF1 Adds New Strategy

The Investment Committee of Regal Investment Fund (ASX: RF1) has approved the addition of the Water Strategy to the Fund. The exposure to the Water strategy will be via the Kilter Water Fund, which is managed by Kilter Pty Limited, a subsidiary of Regal Funds Management. The initial allocation to the strategy is expected

to be implemented from 1 August 2022 and is expected to represent less than 5% of the Fund’s NAV initially. The strategy can represent a maximum of 25% of the Fund. The pace at which the Manager will deploy capital is at the discretion of the Manager and dependent on market conditions.

The Water strategy seeks to invest in water entitlements and water allocation assets and to generate investment returns by providing water allocation and water products to irrigation farmers and through appreciation in the value of investment assets. The Investment Committee believes the addition of the Water strategy to the portfolio will increase portfolio diversification and enable RF1 to better deliver on its investment objective.

DJW Seeks to Raise Capital Through SPP

On 19 July 2022, Djerriwarrh Investments Limited (ASX: DJW) announced a Share Purchase Plan (SPP) to raise capital for investment purposes. Eligible shareholders will be able to invest up to $30,000 in new DJW shares. Shares will be issued at the lower of $2.78 or a 2.5% discount to the VWAP of DJW shares over the 5 trading days up to and including the close of the offer. Shares issued under the offer will be eligible for the interim dividend which will be paid in February 2023.

Applications are scheduled to close on 18 August 2022 and new shares issued on 25 August 2022.

LRT Seeking to Raise Capital Through an Entitlement Issue

On 26 July 2022, Lowell Resources Fund (ASX: LRT) announced
a non-renounceable entitlement issue for eligible unitholders on
a 1-for-3 basis. Participating unitholders will also receive one free unlisted option for each new unit offered. New units will be issued at $1.35 per unit under the Offer and seek to raise up to $13.2m before costs. Options will have an exercise price of $1.65 and a maturity date of 4 March 2024.

There will be a Top-Up Facility for eligible unitholders to apply for additional units in the event of a shortfall.

The capital raised will be applied to the existing investment strategy.

The Offer is scheduled to close on 2 September 2022 with new units expected to commence trading on 12 September 2022.

BTI Makes Follow-On Investment in InstantScripts

Bailador Technology Investments Limited (ASX: BTI) announced
it has completed a $5m follow-on investment in InstantScripts, a leading digital healthcare platform. The valuation of the investment has resulted in a 10% uplift to the valuation of BTI’s existing $16.6m investment in the company. The follow-on investment brings the total investment valuation of InstantScripts to $23.3m.

KKC Releases FY23 Distribution Guidance

On 28 June 2022, KKR Credit Income Fund (ASX: KKC) released its FY23 distribution guidance. KKC has a target distribution of 13.125 cents for FY23, an increase from 12 cents for FY22. Based on the NAV at the date of the announcement, the target distribution represented a yield of 5.82%.

NBI Releases FY23Target Distribution

On 6 July 2022, NB Global Corporate Income Trust Company (ASX: NBI) released its FY23 target distribution. The Trust is targeting distribution of 5.25%p.a., net of fees and expenses based on the NAV as at 1 July 2022. While the target distribution represents an increase on the FY22 target distribution of 4.75%p.a., the target distribution represents a decline in the monthly payment amount based on the NAV as at 1 July 2022.

AFI Maintains Final Dividend For FY22

Australian Foundation Investment Company Limited (ASX: AFI) reported Revenue of $393.4m in FY22, up 49.7% on the pcp and a Net Profit of $360.6m in FY22, up 53.4% on the pcp.

The Company declared a fully franked final dividend of 14 cents
per share, in line with the previous final dividend. The dividend is scheduled to be paid on 30 August 2022. The Board has elected to source 10 cents per share of the final dividend from capital gains on which the Company has paid or will pay tax. The LIC capital gains will equal 14.29 cents per share.

The final dividend takes the full year dividend declared for FY22 to 24 cents per share, fully franked, in line with the previous year. Based on the share price of 2 August 2022, the full-year dividend represented a yield of 2.99%. The premium to NTA at which AFI is trading is weighing on the dividend yield.

A Dividend Reinvestment Plan (DRP) and Dividend Substitution Share Plan (DSSP) are available, the price of which will be set at a 5% discount to the VWAP of the share price over the 5 trading days after the shares trade ex-dividend.

AMH Reports Revenue and NPAT Uplift For FY22

AMCIL Limited (ASX: AMH) reported Revenue of $10.7m in FY22, up 28.2% on FY21 and Net Profit of $8.1m, up 19.8% on FY21.

AMH declared a final fully franked dividend of 2.5 cents per share, in line with the FY21 final dividend declared. The final dividend takes the full-year dividend declared for the FY22 period to 3.5 cents per share.

A Dividend Reinvestment Plan (DRP) and Dividend Substitution Share Plan (DSSP) are available, the price of which will be set at a 2.5% discount to the VWAP of the share price over the 5 trading days after the shares trade ex-dividend.

BKI Reports Record Result for FY22

BKI Investment Company Limited (ASX: BKI) announced a record result for FY22. BKI reported Ordinary Revenue from Investment Portfolio of $62.6m, up 58% on the previous period and an Operating Result after tax and before special investment revenue of $58.1m,

a record for the Company and an increase of 63% on the previous period.

BKI declared a final dividend of 3.65 cents per share, fully franked, and a special dividend of 1 cent per share, fully franked. The final dividend takes the full-year dividend for the FY22 period to 8.65 cents per share, fully franked, including special dividends, up from 5 cents per share declared for the FY21 period. Based on the share price as at 2 August 2022, the FY22 dividend represents a yield of 4.9%.

MIR Reports Strong Revenue Uplift For FY22

Mirabooka Investments Limited (ASX: MIR) reported a 45.5% uplift in Revenue for FY22 to $10.3m, however, Net Profit only increased 4.4% on the pcp to $6.7m with net losses on the trading portfolio of $0.95m compared to a $2.4m net gain in FY21.

MIR declared a final dividend of 6.5 cents per share, fully franked, and a special dividend of 2 cents per share, fully franked. The total ordinary dividends declared for FY22 is 12 cents per share, in line with FY21.

A Dividend Reinvestment Plan (DRP) and Dividend Substitution Share Plan (DSSP) are available, the price of which will be set at a 5% discount to the VWAP of the share price over the 5 trading days after the shares trade ex-dividend.

CDM Announces 4 Cent Fully Franked Final Dividend

Cadence Capital Limited (ASX: CDM) announced a final dividend of 4 cents per share for the FY22 period, taking the full year dividend to 8 cents per share, fully franked, a 60% increase on the dividend declared for the FY21 period.

Based on the CDM share price at 2 August 2022, the full-year dividend represents a yield of 8.6%, net of franking. The Company has 24 cents per share of profits reserved after the payment of the final dividend.

CDO Announces 7.5 Cent Fully Franked Final Dividend

Cadence Opportunities Fund Limited (ASX: CDO) announced a final fully franked dividend of 7.5 cents per share for the FY22 period. This takes the full-year dividend for the period to 15 cents per share. The full-year dividend represented a yield of 6.3% based on the share price as at 2 August 2022.

The Dividend Reinvestment Plan (DRP) will be in operation for the final dividend. Shares will be issued at a 5% discount to the VWAP of the share price over the relevant DRP pricing period.

Magellan FuturePay (CXA: FPAY) Closes

In July, Magellan announced it had resolved to terminate FPAY and return capital to investors with the closure taking effect on 20 July 2022.

The assets of FPAY were realised and the net proceeds were distributed to investors. The Support Trust which comprised a separate pool of assets that was managed for the purposes of supporting FPAY was wound up and the proceeds formed part of the assets of FPAY. Magellan made an additional payment to those investors who
would otherwise receive less than their original investment, after allowing for distributions received. The costs associated with the closure (expect the transaction costs of realising FPAY’s assets) were covered by Magellan and not bourne by FPAY.


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