Australian Foundation Investment Company Limited

Welcome, my name is Geoff Driver, General Manager of Business Spelt and Investor Relations for Australian Foundation Investment Company. I have with me today Mark Freeman, who is CEO at Breckman Eales, Portfolio Manager. Mark, we've just announced our initial results and a feature of that was the 2.5 cent special dividend and we also talked about paying another special 2.5 cent special dividend at the end of this financial year. Can you give us some background or reasoning behind the special dividends and how we approach that?

Yeah, sure. So a lot of the franking credits and dividend paying capacity that comes to us is really through the dividends from the investments we have. But along the way, we also generate some capital gains. So if we reduce a holding or exit a holding for profits, we have to pay tax. That generates franking credits. And that's available to pay out as dividends as well. And so as most people are aware, we do keep a little bit tucked away. it's important that we can sustain dividends during the tough times and we know our shareholders value that but there are points where you go well we've got that covered and we've got more than enough and there's sort of what you call excess and we feel it's important to get that out to shareholders so we've felt like we've had excess ranking credits we felt it was good to spread it across two dividends that's why we've gone the two and a half two and a half And then what we did say is that we would then re-look at it with the final result and look at the situation and then maybe make some comments about what could happen into the future as well. But that would be based on the results. But the principle is there. If we've got excess franking from capital gains, we want to get that to shareholders, which helps support a pretty good dividend yield on the stock.

Brett, it's been a very strong market over the last 6-12 months. Can you comment on AFIC's relative performance and what were the key factors behind it?