Buybacks, banks drive Djerriwarrh bottom line

The investment company reported a 127.4 per cent jump in net profit to $56.85 million for the year to June 30, from $25 million a year earlier.

Total revenue climbed to $53.6 million from $34.11 million the previous year.

Djerriwarrh's board declared a final dividend of 16? a share, fully franked and unchanged from a year earlier. It takes total annual dividends to 26?.

Djerriwarrh's net profit more than doubled due to a low 2009-10 profit resulting from subdued market volatility that year, combined with big cuts to dividends from companies and unrealised losses on investments.

The company is a long-term holder of large-cap stocks and in 2010-11 benefited from a recovery in dividends paid by companies in which it invests, especially banks.

Share buybacks by BHP Billiton and Woolworths also boosted its result.

Several headwinds will drag on the sharemarket's performance over the next six months.

General manager Geoff Driver said recent profit warnings by retailers were not surprising.

"We've seen the savings rate go up, so from the consumer balance sheet perspective things are on a more solid footing," he said.

"But people are very cautious about spending money in the light of housing prices trading sideways or downwards, an equity market which is not producing much and slightly restrictive financial conditions."

Companies were likely to deliver a mixed performance when they reported annual earnings next month.

"The ones that are exposed to the consumer or are impacted by the high Australian dollar are the ones we will be watching out for."