PL8’s Shares Decreased On ASX After Announcing Estimated Net Tangible Asset Backing Per Share

PL8

On 27 December 2018, Investment management Company, Plato Income Maximiser limited (ASX: PL8) announced that as on 21 December 2018 the company was having Pre-tax Net Tangible Asset per share of $0.972 and Post- Tax Net Tangible Asset per share of $1.008.

The Net Tangible Asset values are calculated after deducting December month’s dividend of $0.005 per share which is payable on 31 December 2018 with an Ex-date of 18 December 2018. Following this announcement, PL8’s shared decreased by 1.5 percent as on 27 December 2018.  

In an earlier announcement, the company had announced that as at 14 December 2018, the company was having Pre-tax Net Tangible Asset per share of $0.992 and Post- Tax Net Tangible Asset per share of $1.024.

As at 30 November 2018, the Company’s investments delivered a total return of 2.4 percent and a yield of 8.0 percent (incl. franking after portfolio related fees, costs and taxes) in the last 12 months compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 0.5 percent and a yield of 5.7 percent.

The Board declared three fully franked dividends of $0.005 per share for October, November and December 2018 which translates to an 8.4 percent annualized gross yield based on the company’s share price on November 30, 2018.

The most significant positive contributors to the Company’s investments during November were overweight positions in Qantas (which benefits from the lower oil price) and Insurance Australia as well as an underweight position in Lend Lease which took another $350 million of provisions for its underperforming engineering projects. However, overweight positions in Cimic, Aristocrat Leisure and CSR underperformed.

As per the annual report of 2018, the Company’s Total Shareholder Return (TSR) Performance was -2.6 percent, which is less than the Benchmark return over the same period of 13.0%. The company is expecting Interest rates to remain low with the market expecting only modest rate rises. The Outlook for dividends from Australian shares remains solid, and the company is expecting the market to deliver around 6 percent gross yield.

The company believes that it will be able to continue to generate and pay more income than the Australian share market from a diversified portfolio of Australian shares.  Currently, the company is facing significant political risk with potential changes to franking, CGT and negative gearing domestically, Trump tariff war globally.

In the last six months, the share price of the company decreased by 1.96 percent as on 24 December 2018. PL8’s shares traded at $0.985 with a market capitalization of circa $296.62 million as on 27 December 2018 (AEST 4:00 pm).


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