Tamawood Limited (ASX:TWD) has confirmed that its Dividend Reinvestment Plan (DRP) applies to its next dividend, a fully franked final dividend of 10.5 cents per share payable in December 2026. According to the company's dividend notice lodged with the ASX, DRP shares for this dividend will be newly issued.

Latest developments

Tamawood reported Revenue of $125.6 million for FY26, up 24.6%, while profit after tax rose 41.6% to $8.19 million. Basic Earnings Per Share (EPS) were 20.88 cents, and the company said it remains Debt free.

In its annual report, the board said it intended to consider a final dividend in December 2026, with the amount and franking to be determined following a review. The subsequent dividend notice confirmed a final dividend of 10.5 cents per share, 100% franked, with a full DRP available.

Key numbers

Dividends paid during FY26 totalled 21.5 cents per share, comprising the 10.5 cent FY25 final dividend paid in December 2025 and the 11 cent FY26 interim dividend.

Franking is where the detail matters. The 11 cent interim was fully franked, but the 10.5 cent final paid in December 2025 was unfranked. The newly declared 10.5 cent final dividend is fully franked, and the value of franking credits depends on each shareholder's tax position.

In dollar terms, assuming a 30% company tax rate, the fully franked 11 cent interim carries franking credits that lift its grossed-up value to about 15.7 cents, while the unfranked 10.5 cent final paid in December 2025 carried none. That gives gross dividends of about 26.2 cents for the dividends paid during FY26.

About the company

Tamawood is a Queensland-based group involved in contract home construction, home design, franchising and licensing, and consumer durables. Its residential building Business trades under the Dixon Homes brand, which the company says operates across Queensland, New South Wales and Victoria, while its AstiVita division supplies products such as bathroom fittings, kitchen appliances, and solar and hot water systems. The group also trades small-scale technology certificates linked to renewable energy installations.

Tamawood's mix of building, franchising and product Supply means earnings are tied closely to the health of the residential construction market, particularly in Queensland.

How the DRP works

Tamawood's DRP rules price shares at the arithmetic average of daily volume-weighted average prices (VWAP) over 10 trading days, starting on the second business day after the dividend record date, unless the directors determine otherwise. Elections must be received no later than the business day immediately after the record date. The rules allow the directors to apply a discount at their discretion, and the board can issue new shares, have shares transferred to participants, or use a combination of both.

For the upcoming dividend, the notice confirms a full DRP with newly Issued Shares and a 3% discount to the VWAP-based price, and shareholders who do not elect will receive cash. The company says the DRP has operated since it was reinstated in 2019.

Why it matters for income investors

Tamawood has paid two dividends a year, with an 11 cent fully franked interim in each of 2024, 2025 and 2026, and finals of 9 cents for FY24 and 10.5 cents for FY25. Franking has not been consistent, with the FY25 final paid unfranked.

Under the DRP rules, participants do not pay brokerage or other transaction costs, and shares acquired through the plan are eligible for later dividends. Because the DRP pricing period starts after the record date, the DRP price is determined by trading over the 10-trading-day pricing period, less any discount the board applies.

Whether a dividend is franked affects its after-tax value for shareholders able to use franking credits, while for shareholders unable to use them the cash amount is the more relevant measure.

What comes next

The next steps are the ex-date, record date, DRP election deadline and pricing period for the upcoming dividend, followed by payment in December 2026. Other factors relevant to the company include Queensland housing conditions, building costs and Tamawood's ability to convert contracts into completed homes.

The Annual Report says the company enters FY27 from a position of financial strength and is cautiously optimistic, while noting uncertainty from broader economic conditions, weather events and foreign Capital movements. Future dividends and their franking remain subject to board decisions.

Risks and context

Past dividends do not indicate future payments. The 21.5 cents in dividends paid during FY26 slightly exceeded FY26 basic EPS of 20.88 cents, so payouts have been running at or above earnings, which may be difficult to sustain if profits decline. The unfranked final dividend for FY25 shows that franking can vary with the company's tax position.

Home building is cyclical and exposed to interest rates, construction costs, labour shortages and weather. Because DRP shares are newly issued, participation adds to the share count. Reinvested dividends are generally still assessable income, including any franking credits, and each DRP parcel sets a new cost base for Capital Gains Tax purposes.

Conclusion

Tamawood (ASX:TWD) has declared a fully franked 10.5 cent final dividend with a DRP in operation, under which new shares will be issued at a 3% discount to the VWAP-based price. Higher FY26 revenue and profit and a debt-free Balance Sheet form the backdrop, while variable franking history, payouts close to earnings and housing-market conditions remain relevant considerations.

Key Insights

Tamawood (ASX:TWD) grew FY26 revenue and profit after tax strongly and reported no debt, and has followed its annual report commitment with a fully franked 10.5 cent final dividend. The DRP applies to this dividend, with new shares to be issued at a 3% discount to a 10-trading-day VWAP price.

Dividends paid during FY26 slightly exceeded basic EPS, and franking has varied between dividends, so the level and franking of future dividends remain dependent on earnings, the company's tax position and board decisions.