Contango Income Generator Limited (ASX: CIE) has published its half-year results for the six months ending 31 December 2018.
The Company’s net operating loss after tax for the half-year was $5,958,825 (31 December 2017: profit after tax of $4,896,790). Basic loss per share amounted to 5.7 cents per share for the half-year (31 December 2017: profit of 5.5 cents per share).
The current half-year loss was primarily attributed to a decrease in the value of the underlying Company’s investments. It had occurred during a period of weak performance in global share markets. For the half-year ended 31 December 2018, the after-tax Net Tangible Asset value per share of the Company has decreased from $0.957 to $0.866. After adjusting for the 3.35 cents per share of dividends, the NTA return was -6.0% compared to -7.3% for the ASX All Ordinaries Accumulation Index over the same period.
On 21 February 2019, the company notified that Dr Andrew MacDonald had resigned as Chairman of the board and director of the company. The Board has resolved to appoint Mr Mark Kerr as Chairman in place of Dr MacDonald. The Board has also decided to appoint Mr Marty Switzer as an additional director effective immediately.
The final dividend for the year ended 30 June 2018 of $0.018 per share (50% franked) was paid on 20 September 2018. The first quarterly interim dividend for the year ended 30 June 2019 of $0.0155 per share (50% franked) was paid on 11 December 2018. The second quarterly interim dividend for this year ended 30 June 2019 has been declared at $0.0155 per share and will be 100% franked. Ex-date for the dividend is 25 February 2019 with the dividend to be paid on 12 March 2019.
Dividend or distribution reinvestment plans (DRP) in operation
The rules of the DRP have been distributed to eligible shareholders and are available on the Company’s website. The Company’s DRP provides for a 3% discount to the Volume Weighted Average Price of ordinary shares for the 4 trading days up to and including record date. The last day for receipt of election notices for participation in the DRP is close of business one day after the record date.
On 12 October 2018, CIE released its annual report ending 30 June 2018. During the financial year, the Company paid a total of $8,154,117 to shareholders as dividend payments, up from $5,116,213 in 2017. During the year, the Board decided to reweight CIE’s cash position from 15% to 5%. Also, the level of franking on the Company’s dividends is expected to increase over time as a result of the portfolio’s overall increased equity position. The Board believed that the investment portfolio would be more attractive to potential investors. FY18 saw over 18.9 million options exercised to ordinary shares at a price of $1.00 per option.
CIE remained steadfastly focused on managing its “income” label that is, producing a consistent gross yield that is 1% or more above the market yield. The year ending 30 June 2018 was a positive year with the Company announcing distributions totalling 6.60 cents per share which, based on the 30 June 2017 pre-tax NTA of $1.034, equated to a yield of 6.84% (7.98% including franking).
The stock of the company last traded at A$0.820 (as at 21 February 2019) without any further changes. The company has a market capitalization of circa A$85.34 million and 104.07 million shares outstanding. Its 52-week high was noted at A$1.000 and low at A$0.725. The stock of the company has generated a positive return of 2.50% over last one month.
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