Registered Members Login:
   
Forgotten Your Details? Click Here To Recover +
Welcome To The ShareCafe Community - Talk Shares And Take Stock With Smart Investors - New Here? Click To Register >

A reminder to all members that you agree through the use of ShareCafe, that you understand and accept the TERMS OF USE.


2 Pages (Click to Jump) V   1 2 >   
 
  
Reply to this topic

DJW, DJERRIWARRH INVESTMENTS LIMITED
nipper
post Posted: Jul 20 2020, 12:35 PM
  Quote Post


Posts: 7,517
Thanks: 2549


QUOTE
Djerriwarrh, the yield hungry listed investment company part of the Australian Foundation Investment Co stable, has been forced to slash its final dividend to shareholders in the wake of the unprecedented volatility on the the sharemarket while it sold down key blue chips as its call options were exercised.

Djerriwarrh said its net operating profit, which is the key component of its dividend, was $28.1m, down 25.5 per cent from fiscal 2019. Net operating result per share was 12.54 cents, down from 16.95 cents per share, while net profit was weaker by 4.1 per cent to $32.9m. Revenue from its operating activities, drawn from investing in Australian equities as well as writing call and put options to help supplement its income, was down 28.2 per cent in 2020 to $28.6m.

Djerriwarrh has always prided itself on its ability to produce strong dividend returns for its shareholders, many of which are retirees, but the wild swings in share prices since the coronavirus pandemic emerged this year has dented its ability to generate income.

It declared a final dividend of 5.25 cents per share, down from 10 cents for the same time last year, payable on August 28. This brings total dividends for the year to 14 cents per share, down from 20 cents per share in 2019.

Djerriwarrh said under normal circumstances the final dividend would be close to the net operating result for the half of 4.9 cents per share, but the board considered the difficult conditions brought about by COVID 19 and decided to use a small amount of reserves to bring the final dividend to 5.25 cents. Major sales for the 12 months period were mostly as a result of the exercise of call options, including its positions in CSL, Wesfarmers, Commonwealth Bank and National Australia Bank. There was also a reduction in its holding of James Hardie and positions exited in the year included AUB Group, Ansell, Worley and Treasury Wine Estates.


... not a happy time to run an options based yield strategy, it seems.



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jan 16 2020, 09:20 AM
  Quote Post


Posts: 7,517
Thanks: 2549


In Reply To: nipper's post @ Jan 18 2018, 09:02 AM

DJW dropped its dividend, from 10c to 8.75c. They did pay a 'special' last year before the election.

The stock might lose some of its "above NTA" gloss that comes from its enhanced yield, which is generated by options trading.

And the Half Yearly Report did carry this, which is code for 'expect no miracles': The use of options will typically reshape the profile of returns producing more immediate income at the expense of future capital growth.




--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jan 18 2018, 09:02 AM
  Quote Post


Posts: 7,517
Thanks: 2549


QUOTE
Djerriwarrh seeks to provide an enhanced level of fully franked income in part by using option strategies. This will typically reshape the profile of returns producing more immediate income at the expense of potential capital growth. In falling markets income from options may offset some of the loss from declining share prices.

The emergence of synchronised global growth moved global indices higher. The Australian market has followed with material and energy stocks performing strongly.

In this environment, Djerriwarrh bought back selected in-the-money call option [b]positions to capture more of the potential upside of these holdings rather than let the options be exercised in the rising market.

Call option coverage is at the high end of the normal
10c ff dividend

Given the high level of the market, portfolio activity was focused on buying stocks across a wide range of existing holdings when value was on offer, including writing call options against these purchases. This occurred across several holdings with CSL, Woolworths, BHP, National Australia Bank and Macquarie Group the largest of these.

A limited number of new positions were added, although they are small in the context of the portfolio. These were Brickworks, Ansell and Dulux Group.

Major sales were predominantly because of a deterioration in the outlook for some companies.This included Telstra and TPG Telecom. Whilst Djerriwarrh continues to hold positions in these companies, the structural adjustments occurring in the telecommunications industry through the implementation of the NBN has made these holdings less compelling.




--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
birnam
post Posted: Apr 30 2010, 04:04 PM
  Quote Post


Posts: 111
Thanks: 17


In Reply To: Brendan's post @ Apr 30 2010, 03:08 PM

What is there to watch? It's a LIC that pretty much follows the financials index -as it should given its overweightedness to that sector. It's conservative, bland, boring and totally un-sexy. That might be why I like it!



 
Brendan
post Posted: Apr 30 2010, 03:08 PM
  Quote Post


Posts: 297
Thanks: 10


Anyhow still watching this ?

 
wind2close
post Posted: Jan 16 2006, 09:36 AM
  Quote Post


Posts: 326


In reply to: wind2close on Monday 03/10/05 12:07pm

Blue skies from here.

W2C graduated.gif

 

Featured Stock Stories





wind2close
post Posted: Oct 3 2005, 12:07 PM
  Quote Post


Posts: 326


In reply to: wind2close on Thursday 04/08/05 01:12pm

Next target $4.25

W2C wink.gif

 
wind2close
post Posted: Aug 4 2005, 01:12 PM
  Quote Post


Posts: 326


In reply to: wind2close on Monday 25/07/05 03:18pm

It looks like there's no stopping this stock?

It continues to move from strength to strength.

W2C wub.gif

 
wind2close
post Posted: Jul 25 2005, 03:18 PM
  Quote Post


Posts: 326


In reply to: brickwalls on Thursday 05/02/04 10:40am

Knocking on $4's door.

W2C wub.gif

 
brickwalls
post Posted: Feb 5 2004, 10:40 AM
  Quote Post


Posts: 435
Thanks: 13


Outlook - from Qrt Rpt
"Most market commentators are generally expecting improved economic performance in the second half of the 2003/2004 financial year. As a result, the market generally has an optimistic view of earnings growth and anticipates rising share prices. There are, however, a number of issues which may detract from the optimistic scenario, in particular, the possibility of rising interest rates, both here and abroad, in a bid to correct economic imbalances. There is also particular concern in Australia about the prospect of a continuing strengthening A$ relative to the US$. While positive for importers and overseas travellers, there are many other areas of the economy viewing this strong rise as an unwelcome development.
Other issues which may affect the current benign outlook would be any significant deterioration in the global security situation, terrorist disturbances or some other unexpected shock. While such events may have a temporary impact on equity prices, they may have another side effect of increasing the level of volatility, which affects option prices.
Given the current medium to long-term optimism regarding the major resource companies noted above, we have been continuing to add to our holdings of these stocks in our portfolio. The recent weakness in bank stocks has also given us the opportunity to add to our holdings in these companies as we have been somewhat underweight in this area of market."
Currently @$3.67
Top 20 Investments - Ordinary securities $ million
66.4 NAB National Australia Bank
46.4 CBA Commonwealth Bank of Australia
39.7 BHP BHP Billiton
38.4 TLS Telstra Corporation
37.6 NCP The News Corporation (a)
30.3 ANZ Australia and New Zealand Banking Group
19.6 WBC Westpac Banking Corporation
15.7 WAN West Australian Newspapers Holdings
14.3 WPL Woodside Petroleum
14 RIO Rio Tinto
13.4 TOL Toll Holdings
12.7 TCL Transurban Group
11.9 WOW Woolworths
11.5 AMP AMP
11.4 AGL The Australian Gas Light Company
10.8 CML Coles Myer
10.4 FGL Foster's Group
10 AMC Amcor
9.2 BIL Brambles Industries
8.9 AWC Alumina
Total 432.6
As % of Total Portfolio Value ($594.4m) 72.8%
(excludes Cash & Bank Bills)


 
 


2 Pages (Click to Jump) V   1 2 >

Back To Top Of Page
Reply to this topic


You agree through the use of ShareCafe, that you understand and accept the TERMS OF USE.


TERMS OF USE  -  CONTACT ADMIN  -  ADVERTISING