NAOS Ex-50 Opportunities Company Ltd (ASX: NAC) is a listed investment company (LIC) that focuses on larger Australian businesses outside of the top 50.
The LIC reported a headline net profit figure of $3.9 million for FY18, which was a 259% increase compared to FY17.
Its portfolio produced a 10.25% performance post all operating expenses, but before fees, in FY18. Since inception its portfolio has returned an average of 15.21% per annum post all operating expenses, but before fees, which is a solid return.
The total year dividend increased by 5% to 5.25 cents, fully franked. This means it currently offers a grossed-up dividend yield of 7.4%. Total shareholder returns (TSR) for the LIC for the year was a negative 2.9% due to the increased discount to the LIC's pre-tax NTA.
During the year it changed its name to better reflect the mid-cap investment strategy. The LIC is also changing it benchmark from the RBA cash rate plus 250 basis point to the S&P/ASX 300 Industrials Accumulation Index, which is a more appropriate benchmark.
Pleasingly for retirees, the LIC is increasing its dividend frequency to every quarter which means it now offers a more frequent income stream.
Two of the best performers for the portfolio were Elders Ltd (ASX: ELD) and MNF Group Ltd (ASX: MNF).
Naos likes to run a concentrated portfolio of around 10 to 15 positions, which can lead to significant underperformance or outperformance in any given year. However, over the longer-term it can lead to strong returns if stock selection is done well.
Foolish takeaway
NAOS Ex-50 Opportunities Company is currently trading at a 9% discount to the pre-tax NTA at the end of July 2018, which is a pretty attractive discount. Whilst it isn't my favourite Naos LIC, I do think it can have a place for retiree portfolios and income-seekers.
