FY23 LIC and LIT Review

The month of August was dominated by results released by LICs and LITs. In the attached report we take a look at the key news flow for the month as well as providing a review of the share/unit price performance of LICs and LITs over the FY23 period, along with how the declared dividends/distributions compared to the prior year. 

While portfolio performance was improved, in many cases shareholder returns lagged with a number of LIC/LIT experiencing negative shareholder returns despite positive portfolio performance.

From a dividend/distribution perspective, investors fared well, with more than 50% of LICs and LITs increasing the ordinary dividend/distribution for the FY23 period and 78.8% of them either maintaining or increasing their ordinary dividend/distribution on the prior year.

There were a few key news items outside of results including:

•  AFI Board Changes: Australian Foundation Investment Company Limited (ASX: AFI) announced that John Paterson and Catherine Walter will retire at the conclusion of the AGM to be held on 3 October 2023. Mr. Paterson who is the Chair of the Board, has been a Director since 2005, serving as an Alternate Director from 1987 to 2005. Mr. Paterson is Chair of the Investment Committee, a member of the Remuneration, Nomination and Audit Committees, and a non-executive director of Australian Investment Company Services Limited (AICS), a subsidiary of AFI. Ms. Walter has been a Director since 2002 and is currently Chair of the Nomination Committee and a member of the Remuneration, Investment and Audit Committees. The Board has elected Craig Drummond as the Chair to replace Mr. Paterson with effect from the conclusion of the AGM. Mr. Drummond has been a Director of AFI since July 2021 and sits on the Investment and Nomination Committees and is the non-executive Chair of AICS. Mr. Drummond is currently the Chair of Transurban Ltd, President of the Geelong Football Club Limited and a Governor of The Ian Potter Foundation.
• ARG Board Changes: Argo Investments Limited (ASX: ARG) announced Roger Davis will be retiring from the Board effective 30 September 2023. Mr. Davis was appointed to the Board in 2012. Melissa Holzberger has been appointed to the Board as an Independent Non-Executive Director. Ms. Holzberger is an experienced director and commercial, energy and resources lawyer with over 20 years’ experience. Ms. Holzberger is currently a Non-Executive Director of Paladin Energy Ltd (ASX: PDN) and Andromeda Metals Ltd (ASX: ADN), and a former Non-Executive Director of Silex Systems Ltd (ASX: SLX). Ms. Holzberger has served on government, public and not-for-profit boards including the Australian Radiation Protection and Nuclear Safety Agency’s Radiation Health and Safety Advisory Council (current), Tyre Stewardship Australia, Australian Livestock Export Corporation and Karting
  Australia.
• PIC Appoints Michael Clarke to Board: Perpetual Equity Investment Company Limited (ASX: PIC) announced the appointment of Michael Clarke to the Board as a Non-Executive Director, effective 1 September 2023. Mr Clarke will stand for election at the AGM on 19 October 2023. Mr Clarke will also be appointed to the Audit and Risk Committee and Nomination and Corporate Governance Committee. Mr Clarke has held various roles in the financial markets and wealth management industry. The appointment forms part of the Board renewal process and seeks to strengthen the skills, knowledge, experience and
  diversity of the Board.
  
• PGG Unitholders Approve Delisting: Unitholders of Partners Group Global Income Fund (ASX: PGG) approved the delisting of the Fund at the Unitholder Meeting held on 2 August 2023. Units will be suspended from trading on the ASX after the market closes on 17 November 2023 before being officially removed from the ASX on 22 November 2023. Unitholders who do not wish to remain invested in the Fund can sell their units on market before the Fund is suspended from trading. Unitholders that seek to withdraw from the Fund after 17 November 2023, will be subject to the relevant Transition Fee that was approved at the Unitholder Meeting for the first 12-months post de-listing. Redemptions will also be subject to a limit of 5% per month in the unlisted fund structure.
• HM1 Increases Dividend Frequency: Hearts & Minds Limited (ASX: HM1) announced in their full-year results that the Company will be increasing the dividend frequency from annual to semi-annual. The Company previously paid a dividend in April after the roll over of the conference portfolio. The Company now intends to pay a dividend in April and October each year. The Company paid a dividend of 13.5 cents per share in April 2023 and declared a semi-annual dividend of 7 cents per share, fully franked, to be paid in October 2023.