FY25 Dividend Estimated at AUD 0.0274 per Unit with 13.4% Franking
Lowell Resources Fund updates its estimated FY25 dividend to AUD 0.0274 per unit with a partly franked component, alongside a revised distribution reinvestment plan price at a 10% discount.
- Estimated ordinary dividend of AUD 0.0274 per unit for FY25
- Dividend partly franked at 13.4%, with unfranked portion predominating
- Distribution reinvestment plan (DRP) price set at AUD 1.22 per unit
- DRP securities to be newly issued and rank pari passu from 31 July 2025
- No external approvals required prior to dividend payment on 31 July 2025
Dividend Update for FY25
Lowell Resources Fund (ASX, LRT) has provided an update on its dividend distribution for the financial year ending 30 June 2025. The fund estimates an ordinary dividend of AUD 0.0274 per fully paid unit. Notably, this dividend is only partially franked at 13.4%, reflecting a modest franking credit component of AUD 0.003672 per unit, with the majority of the dividend being unfranked.
Distribution Reinvestment Plan Price Revision
The fund has also revised the price applicable to its Distribution Reinvestment Plan (DRP). The updated DRP price is set at AUD 1.22 per unit, which incorporates a 10% discount based on the five-day volume weighted average price (VWAP) leading up to the record date. This discount is designed to incentivize unit holders to reinvest their distributions back into the fund, potentially supporting the fund’s capital base.
New Units and Payment Timeline
Units issued under the DRP will be newly created and will rank equally with existing units from the issue date of 31 July 2025. This issuance approach may have a dilutive effect on existing unit holders, depending on the level of participation in the DRP. The dividend payment date is also scheduled for 31 July 2025, with no requirement for external approvals such as security holder or regulatory consents, streamlining the distribution process.
Context and Implications
Lowell Resources Fund’s update comes as part of its ongoing communication to investors, providing clarity on income returns and reinvestment options. The partial franking of the dividend suggests a tax strategy balancing franking credits with available income streams. The DRP discount is a common mechanism to encourage reinvestment, which can be a positive signal of management’s confidence in the fund’s prospects. However, investors will want to monitor the final dividend confirmation expected on 31 July 2025 and assess how the new unit issuance might impact unit price and fund structure.
Bottom Line?
Investors should watch for the final dividend confirmation and DRP uptake to gauge the fund’s capital dynamics and income sustainability.
Questions in the middle?
- Will the final dividend amount differ materially from the current estimate?
- How will unit holders respond to the 10% DRP discount in terms of participation rates?
- What impact will the new unit issuance have on the fund’s unit price and overall capital structure?
