Image source: © 2025 Krish Capital Pty. Ltd.

Highlights

  • FY25 ordinary dividend up 1% to 7.90 cents per share fully franked, with a final dividend of 4.00 cps.

  • Total ordinary revenue rose 1% to $69.3 million, driven by higher dividends from major holdings.

  • Portfolio return for FY25 reached 13.4%, while total shareholder return stood at 11.5%.

BKI Investment Company Limited (ASX: BKI) has announced its financial results for the year ended 30 June 2025, highlighting a stable revenue performance, an increase in dividends, and continued disciplined investment strategy, despite a backdrop of persistent global economic challenges.

Financial Performance Overview

BKI reported total ordinary revenue of $69.3 million for FY25, a 1% increase over the previous year. Ordinary revenue from the investment portfolio rose 2% to $65.1 million, supported by higher dividend receipts from key holdings such as Commonwealth Bank, Suncorp Group, Dalrymple Bay Infrastructure, Telstra, and APA Group.

Operating result before tax and special investment revenue was $66.8 million, also reflecting a 1% increase from FY24. However, earnings per share declined 4% to 7.53 cents, and net profit after tax including special investment revenue dropped to $61.9 million, down from $64.4 million in FY24.

Dividends and Yield

The Board declared a final fully franked dividend of 4.00 cents per share, bringing the total dividend for FY25 to 7.90 cents per share, up 1% year-on-year. Based on the closing share price of $1.755 as of 30 June 2025, BKI's grossed-up dividend yield stands at 6.4%.

BKI confirmed its Dividend Reinvestment Plan (DRP) will remain in place, allowing shareholders to reinvest dividends into shares purchased on-market, thereby avoiding dilution of existing holdings. The DRP will be priced at a nil discount to the volume-weighted average price (VWAP).

Portfolio and Investment Activity

During the year, BKI invested $166 million in the market and made sales totalling $154 million, primarily reinvesting in existing positions such as Dalrymple Bay Infrastructure, Telstra, Suncorp, Transurban, and Harvey Norman. The portfolio was actively rebalanced with the exit of holdings in Nine Entertainment and Orora, while a position was established in Johns Lyng Group.

As at 30 June 2025, the portfolio comprised 39 stocks, with the top 25 holdings and cash accounting for 89.5% of the total. The investment portfolio was valued at $1.47 billion, with cash and equivalents representing 6.8%.

Performance Metrics

BKI delivered a net portfolio return of 13.4% for FY25, compared to the 15.2% return from the S&P/ASX300 Accumulation Index. Total shareholder return for the year was 11.5%, with a positive finish in June that saw a 3.2% return, outpacing the index by 1.8%.

Key contributors included Commonwealth Bank (+50%), Dalrymple Bay Infrastructure (+53%), Telstra (+40%), and Wesfarmers (+34%). On the downside, Ramsay Healthcare (-21%), New Hope (-17%), and Aurizon (-13%) detracted from performance.

Outlook and Strategy

BKI remains focused on maintaining a diversified portfolio of high-quality, dividend-paying companies with a long-term investment horizon. Amid geopolitical tensions, interest rate uncertainty, and inflation concerns, the company continues to prioritise capital preservation and income generation.

With no debt, a low management expense ratio of 0.166%, and over $110 million in cash or liquid assets, BKI is positioned to take advantage of emerging opportunities while delivering sustainable income to shareholders.