Clime Capital (ASX:CAM) is offering a Dividend Reinvestment Plan (DRP) on its latest quarterly dividend. The listed investment company pays dividends every quarter, and its DRP applies to the newly declared September quarter dividend of 1.35 cents per share, 50% franked, with new shares issued at a 1.0% discount to the weighted average market price.

Clime Capital paid four quarterly dividends of 1.35 cents per share during FY26, taking the total for the year to 5.40 cents per share.

Latest developments

Clime reported an unaudited FY26 pre-tax profit of $13.4 million and declared its September quarter dividend. Its Appendix 4E showed profit after tax of $10.3 million, up 236%, and Earnings Per Share of 7.09 cents, compared with 2.05 cents in the prior year. The company attributed the result mainly to net unrealised gains on the investment portfolio and higher distributions received, partly offset by lower realised gains. Clime also estimated an unaudited pre-tax profit of $1.4 million for July, the first month of FY27, while noting such figures are preliminary.

The board said it is assessing a possible Special Dividend of 0.50 cents per share, 50% franked, subject to completion of the FY26 audit and board approval, and noted there is no assurance one will be declared. It also said directors are undertaking a detailed review of the valuation and reporting of its unlisted investments, given increased scrutiny of private credit, with audited results expected to follow.

Clime's mid-September update put pre-tax Net Tangible Assets (NTA) at an estimated 81.0 cents per share, before the September quarter dividend. It also reported ongoing on-market buy-backs of CAM shares and its CAMG notes.

Key numbers

The four dividends paid during FY26 were each 1.35 cents per share, taking the total to 5.40 cents. The latest September quarter dividend is 50% franked, in line with most recent payments, although the March quarter dividend carried 65% franking.

The value of franking credits depends on each investor's individual tax position. The Appendix 4E reported pre-tax NTA of 84.0 cents per share at the end of FY26, while the mid-September estimate was 81.0 cents per share.

About the company

Clime Capital is a listed investment company managed by Clime Asset Management that invests in ASX-listed securities and unlisted unit trusts. It aims to provide shareholders with returns through dividend income and capital appreciation. Its mid-September update listed major Equity holdings including BHP, CBA, CSL, ANZ and JB Hi-Fi, with equities around 60% of gross assets.

The company also has listed CAMG notes, which pay interest monthly, and it has indicated an intention to continue declaring Ordinary Dividends each quarter.

How the DRP works

Clime's Appendix 4E states that its DRP applied to all dividends paid during FY26 and will continue to apply to future dividends. For the September quarter dividend, the DRP price is the weighted average Market Price of shares sold on the Record Date and the three preceding trading days, less a 1.0% discount. Elections must be lodged by the deadline set out in the dividend notice, and DRP shares are a new issue ranking equally with existing shares.

The same 1.0% discount applied to the June quarter dividend, and Clime confirmed the DRP price under the plan's methodology and issued new shares to participants. Shareholders can refer to the DRP rules and each dividend notice for the applicable terms.

Why it matters for income investors

Clime's quarterly schedule means dividends are paid four times a year, compared with the half-yearly schedule used by many ASX companies. The DRP allows participating shareholders to receive additional shares instead of cash without brokerage, at a 1.0% discount to the weighted average market price over the pricing period.

Shares allocated through the DRP are themselves eligible for later dividends. DRP shares are issued at market-based prices, so the number of shares received depends on trading during each pricing period.

What comes next

The September quarter dividend will be paid in October, following the ex-date and record date set out in the dividend notice. Clime has said it expects to release audited FY26 financial statements, which are expected to reflect the outcome of the unlisted investment review, and the board will then consider whether to declare the possible special dividend. Clime also releases mid-month and month-end NTA updates.

Any future dividend amount, franking level or DRP terms will be set by the board and disclosed in a dividend notice.

Risks and context

Past dividends are not a forecast. Clime has kept its quarterly dividend at 1.35 cents, but franking has varied and payouts depend on investment income, realised gains and reserves. The review of unlisted investment valuations adds uncertainty until audited results are released. As with any listed investment company, returns also depend on market conditions and the investment decisions made for the portfolio.

Because the DRP issues new shares, it adds to the share count. Reinvested dividends are still assessable income, and each DRP parcel sets a new cost base for Capital Gains Tax purposes, which is relevant with frequent quarterly allocations.

Conclusion

Clime Capital (ASX:CAM) continues to pay quarterly dividends of 1.35 cents per share and operates a DRP that issues new shares at a 1.0% discount. The pending audited results, the unlisted investment review and a possible special dividend, which remains subject to audit completion and board approval, are the next items the company has flagged.

Key Insights

Clime Capital (ASX:CAM) declared a 1.35 cent, 50% franked September quarter dividend with its DRP applying at a 1.0% discount, with DRP shares newly issued. FY26 profit after tax rose 236% to $10.3 million, driven mainly by net unrealised portfolio gains and higher distributions received.

A possible 0.50 cent special dividend remains conditional on completion of the audit and board approval, while a review of the valuation and reporting of unlisted investments is under way ahead of audited results. Franking has varied across recent quarters, and future dividend terms will be set by the board.