AVI: modest growth, generous dividend — shares yield 7.7%

On August 25, AVI released results for the fiscal year ended June 30, 2026. Revenue grew 1.4%, EBITDA 3.8%, net profit 5.5%. At the current price, the share looks attractive thanks to a high dividend yield and low leverage.

Key takeaways

— Revenue grew 1.4% to ZAR 16,200.0 million, but operating profit grew faster

— EBITDA margin expanded by 0.7 pp to 26.7%

— Net profit grew 5.5% to ZAR 2,562.6 million for the trailing twelve months

— Dividend yield of 7.7% is above its three-year average and the key rate

— Net debt fell by ZAR 0.5 billion over the year to ZAR 1,666.1 million

— Multiples below its own history: P/E 11.0, EV/EBITDA 6.9

— Portal's model puts upside at -4% — share is close to fair value

Attractiveness

Key figures, ZAR bn

Revenue grew 1.4% to ZAR 16,200.0 million, but operating profit grew faster

For the reporting period ended June 30, 2026, AVI's revenue reached ZAR 16,200.0 million, up 1.4% year-on-year. Growth is modest, but it was accompanied by faster EBITDA growth of 3.8% to ZAR 4,329.2 million for the trailing twelve months.

Faster operating profit growth means the company is not only increasing sales but also improving efficiency. This is evident from margin dynamics: EBITDA margin for the reporting period was 26.7% versus 26.0% a year earlier.

EBITDA margin expanded by 0.7 pp to 26.7%

EBITDA margin for the reporting period increased from 26.0% to 26.7%. The 0.7 percentage point expansion is the result of operating expenses growing slower than revenue.

Margin improvement is a positive signal: the company is coping with cost inflation and maintaining pricing discipline. Combined with revenue growth, this led to EBITDA increasing by 3.8% over the trailing twelve months.

Net profit grew 5.5% to ZAR 2,562.6 million for the trailing twelve months

Net profit for the reporting period grew 5.5% year-on-year. For the trailing twelve months it was ZAR 2,562.6 million, corresponding to a net margin of 15.8% for the reporting period versus 15.2% a year earlier.

Profit growth outpaced revenue, reflecting operational efficiency. However, part of this growth may be due to one-off factors not disclosed in the provided data.

Dividend yield of 7.7% is above its three-year average and the key rate

Over the trailing twelve months, AVI paid dividends yielding 7.7% at the current price. This is above the three-year average yield, which, according to our data, was around 6%.

We expect the company to maintain a generous dividend policy this year. Our estimate, based on trailing net profit and a payout ratio of about 75%, gives a dividend per share of approximately ZAR 7.5, corresponding to a yield of about 7.5% at the current price.

The payout could be smaller if the company decides to allocate more funds to investments or debt repayment, but given the low leverage, we consider such a scenario unlikely.

Net debt fell by ZAR 0.5 billion over the year to ZAR 1,666.1 million

As of the latest balance sheet date, AVI's net debt stood at ZAR 1,666.1 million, down ZAR 0.5 billion from the previous reporting date. Over the trailing twelve months, the decline was ZAR 0.0 billion.

The ratio of net debt to EBITDA for the trailing twelve months is 0.38. This is a low level that does not constrain the company from paying dividends or investing.

Multiples below its own history: P/E 11.0, EV/EBITDA 6.9

Current P/E for the trailing twelve months is 11.0, and EV/EBITDA is 6.9. These are below the three-year averages, which, according to our data, were around 13 and 8, respectively.

Low multiples reflect modest revenue growth, but the company generates stable cash flow: operating cash flow for the trailing twelve months is ZAR 3,300.0 million, significantly exceeding net profit.

ROE is 35.7% — a high figure confirming efficient use of capital.

Portal's model puts upside at -4% — share is close to fair value

According to the portal's model, which multiplies EBITDA growth by a target multiple and compares with market capitalization, the share's upside potential is -4%. This means the share trades near fair value as calculated by our model.

Market capitalization is ZAR 28,187.4 million. At this price level, the investor receives a dividend yield of 7.7%, making the share attractive for income strategies despite limited upside potential.

Valuation on the latest reported figures

Bottom line

AVI delivered modest but quality growth: revenue increased 1.4%, EBITDA margin expanded to 26.7%, net profit grew 5.5%. Leverage is low — net debt is 0.38 EBITDA, allowing the company to maintain generous dividends. Dividend yield of 7.7% is above its three-year average and the key rate, making the share attractive for income investors. However, the portal's model estimates upside at -4%, limiting appeal for capital growth investors. Verdict — 'rather attractive': the share is interesting primarily for its dividend, not for price appreciation.