BKI Investment : Half Yearly Report and Accounts

BKI INVESTMENT COMPANY LIMITED

ABN: 23 106 719 868

Appendix 4D‐ Half Year Report

31 December 2018

Lodged with the ASX under Listing Rule 4.2A

Contents

Appendix 4D - Half Year Report	2‐4
Interim Financial Report	5‐23
Auditors Independent Review Report	24‐25
Auditors Independence Declaration	26

The reporting period is the half year ended 31 December 2018 with the previous corresponding period being the half year ended 31 December 2017.

1

Appendix 4D - Half Year Report

Results for Announcement to the Market

% Change

Dec 2018 $'000

Dec 2017 $'000

Revenue Performance:

Dividends and distributions - Ordinary Dividends and distributions- SpecialUp Up Total income from ordinary activities Up 11.8 to 26,769 5,941 to 24,044 107.9 to 52,052

from 23,934 from 398 from 25,037

Profits:

Operating result after tax ‐ before special investment revenue and applicable taxUp Special Investment revenue net of applicable tax Up Net profit from ordinary activities after tax attributable to shareholders Up Net profit attributable to shareholders Up 12.2 to 25,479 5,941 to 21,617 103.8 to 47,096 103.8 to 47,096

from 22,715 from 398 from 23,113 from 23,113

Earnings per share:

% Change

Dec 2018

Dec 2017

Cents

Cents

Basic earnings per share before special investment revenue and applicable taxDown Basic earnings per share after special investment revenue Up 4.1 to 3.51 73.7 to 6.48

from 3.66 from 3.73

Dividends per share:

Interim - Ordinary Steady at 3.625	from 3.625
Interim - Special Up to 1.500	from nil

2

Appendix 4D - Half Year Report

Results for Announcement to the Market (continued)

Explanation of Operating Results

The Reported Operating Result for the half year ended 31 December 2018 excluding special investment revenue was $25.5 million, an increase of 12.2% over the previous corresponding period.

The Net Consolidated Profit After Tax for the half year including special investment revenue was $47.1 million, an increase of 104% over the previous corresponding period. This was driven by a large amount of special dividends received during the period; including the fully franked special dividend component of the BHP off-market buy-back, and a non-cash unfranked dividend from Wesfarmers representing a portion of the value of Coles shares received in the demerger.

Basic Earnings per Share increased 74% to 6.48 cents per share, driven by the significant increase in special dividend income. However, basic Earnings per Share before special investment revenue decreased 4% to 3.51 cents per share, driven by a material increase in BKI issued shares following the entitlement offer completed in June 2018.

Special

Ordinary investment	Statutory
Operations revenue	Numbers
$'000 $'000	$'000

Revenue from investment portfolio	26,769	24,044	50,813
Revenue from bank deposits	1,239	-	1,239
Income from operating activities	28,008	24,044	52,052
Operating expenses	(1,068)	-	(1,068)
Operating result before tax	26,940	24,044	50,984
Income tax expense	(1,461)	(2,427)	(3,888)
Net operating result	25,479	21,617	47,096
Cents per	Cents per
share	share
Basic and diluted earnings per share	3.51	6.48
3

Appendix 4D - Half Year Report

Results for Announcement to the Market (continued)

NTA Backing

31/12/2018	31/12/2017
Net tangible asset backing per ordinary share before tax	150.5 cents	166.7 cents
Net tangible asset backing per ordinary share after tax	145.8 cents	155.8 cents
Additional Dividend Information

The directors have declared an interim ordinary dividend of 3.625 cents per share and a special dividend of 1.500 cents per share, both fully franked at the tax rate of 30%. Both dividends will be paid on Thursday 28 February 2019, the Ex-dividend date is Friday 8 February 2019, and the Record Date for determining entitlements to the dividend is Monday 11 February 2019.

The Company will continue its Dividend Reinvestment Plan, offering shareholders the opportunity to receive additional shares in the Company instead of receiving cash dividends. The Dividend Reinvestment Plan will be offered for both the interim dividend and special dividend, at a nil discount. The last date for the receipt of an election notice to participate in the Dividend Reinvestment Plan is Tuesday 12 February 2019.

Shareholders can update their election notices electronically by following the link on the Share Registry page of the BKI website. (https://bkilimited.com.au/dividend-reinvestment-plan/)

Shareholders are also reminded that BKI will no longer pay dividends by cheque to shareholders with a registered address in Australia or New Zealand. These shareholders will need to complete a direct credit form and return it to BKI's share registry. Shareholders can obtain the relevant form by following the link to BKI's Share Registry (https://www.advancedshare.com.au/Investors/)

4

ABN 23 106 719 868

INTERIM FINANCIAL REPORT

FOR THE HALF YEAR ENDED 31 DECEMBER 2018

5