The BKI Investment Company Ltd (ASX: BKI) share price has climbed 1.8% higher this morning after the company released its full-year 2019 results before market open.
What were the highlights from BKI's results?
The Aussie investment company's underlying income from operating activities rose 13% to $54.3 million while its net operating result also shot 11% higher on $49.2 million.
The underlying result excludes special investment income from a number of items including the BHP Group Ltd (ASX: BHP) off market buyback and special dividends from a number of its Aussie investments.
BKI's ordinary dividend remains unchanged at 7.325 cents per share (cps) in line with its 2018 dividend, while also announcing a fully franked special dividend of 2.50 cps in the latest result.
The company's earnings per share (EPS) soared 42% to 10.26 cps from 2018 levels (including special investment income) despite falling 5% on an underlying basis.
BKI's net profit after tax (NPAT) attributable to shareholders increased 66% on prior corresponding period to $74.7 million with BKI noting the strong result was driven by higher dividends received from the likes of BHP, Macquarie Group Ltd (ASX: MQG) and Woodside Petroleum Ltd (ASX: WPL).
Where to now for BKI?
The company noted several negative headwinds facing the investment group including falling interest rates, falling commodity prices, tighter credit conditions and the Aged Care Royal Commission, among others.
In terms of tailwinds, management sighted strong global demand for Aussie commodities, population growth, significant superannuation fund flows and a depreciating Aussie dollar as strong positives for BKI's outlook.
Macro concerns sighted by BKI in its investor presentation include an uptick in unemployment rates and falling GDP growth, while weak labour data is also weighing on the group's performance outlook for the next year or so.
Tactical credit investments in the likes of Sydney Airport Holdings Pty Ltd (ASX: SYD) and Transurban Group (ASX: TCL) have managed to maintain the company's strong investment income while the Aussie yield curve has headed south and inverted in the first half of the year.
BKI's portfolio remains heavily weighted towards the banks with 5 of its top 10 holdings including the major banks, while major underweights for the group for FY2019 include CSL Ltd (ASX: CSL) and BHP.
