Milton : Appendix 4D Half Year Report 31 December 2016

MILTON CORPORATION LIMITED‌‌

ABN 18 000 041 421

APPENDIX 4D - HALF YEAR REPORT RESULTS FOR ANNOUNCEMENT TO THE MARKET HALF-YEAR ENDED 31 DECEMBER 2016

(Comparative figures being the half-year ended 31 December 2015)

Revenue	% Movement
Operating revenue	Down 10.7%	$63.7 million
Special investment revenue	Down 78.8%	$0.1 million

Earnings Profit after tax to shareholders:
Excluding special investment revenue	Down 10.7%	$60.6 million
Including special investment revenue	Down 11.4%	$60.8 million
Earnings per share, basic and diluted:
Excluding special investment revenue	Down 11.6%	9.32 cents
Including special investment revenue	Down 12.2%	9.34 cents

Dividend information Interim fully franked ordinary dividend	No change	8.7 cents
The Dividend Reinvestment Plan is in operation for the interim dividend
Interim dividend dates:
Ex dividend date	15 Feb 2017
Record date	16 Feb 2017
Payment date	2 Mar 2017

Net tangible asset backing per share (NTA) Before provision for tax on unrealised capital gains	31 Dec 2015 $4.50	31 Dec 2016 $4.47
After provision for tax on unrealised capital gains	$3.98	$3.97

Refer to the attached media release for commentary and explanation of the results.

This report is based on financial statements which have been subject to independent review by the auditors, Pitcher Partners, Sydney.

All documents comprise the information required by listing rule 4.2A.

This information should be read in conjunction with the 2016 Annual Financial Report.

Dividend Reinvestment Plan (DRP)

Eligible Shareholders may elect to have all or part of their dividend payment reinvested in new ordinary shares.

Pricing of the new DRP shares will be equal to the volume weighted average selling price (VWAP) over the five business day period commencing on 17 February 2017 being the first trading day after the Record Date.

The last day for the receipt of an election notice for participation in the DRP is 17 February 2017.

MILTON CORPORATION LIMITED

ABN 18 000 041 421

Level 4

50 Pitt Street

Sydney NSW 2000

PO Box R1836

Royal Exchange NSW 1225

Telephone: [phone]

Facsimile: [phone] Email: [e-mail]:www.milton.com.au

ASX code: MLT Share Registry Enquiries: 1800 641 024

ASX+MEDIA RELEASE 25 JANUARY 2017

SYDNEY, 25 January 2017 - Milton Corporation Limited reports net profit after tax for the six months to 31 December 2016 of $60.8 million out of which a fully franked interim dividend of 8.7 cents per share will be paid.

Excluding special dividends, underlying operating profit was $60.6 million, which is 10.7% below that of the previous corresponding half. The lower profit was mainly attributable to a reduction in ordinary dividend income and trading profits earned in this half.

The portfolio of investments in Australian listed companies and trusts delivered dividend and trust distributions totalling $61.7 million, including $55 million of franked dividends.

Milton's managing director, Mr Frank Gooch said, "Increased dividend receipts from 50% of the number of companies held in the investment portfolio were not sufficient to offset lower dividends from a small number of companies, particularly those exposed to the resources and energy sectors, and so investment income fell by 6% this half."

The directors have declared a fully franked interim dividend of 8.7 cents per share, which is in line with the previous interim dividend. This dividend will be paid on 2 March 2017.

One of the benefits of the LIC structure is that the fully franked dividend can be at least maintained even though earnings have declined.

"The reliability of the fully franked ordinary dividend is a key attraction for many of our 24,270 shareholders and they are very much aware that Milton has paid a dividend every year since 1958 and the full year dividend has increased each year over the last five years," Mr Gooch said.

Total assets at 31 December 2016 included an investment portfolio valued at $2.7 billion, cash of

$131 million and other assets amounting to $39 million.

With no debt on the balance sheet, the net tangible assets, before provision for tax on unrealised capital gains was $2.9 billion, which equated to $4.47 per share.

Even though the market was reasonably fully valued throughout the six months, opportunities did arise that enabled a total of $38 million to be invested in 28 companies. Companies new to the portfolio were Charter Hall Group, Charter Hall Long Wale REIT, Henderson Group PLC and Growthpoint Properties.

The next twelve months will be an interesting time for global markets as the U.S. transitions to a new president and the UK negotiates its Brexit.

Mr Gooch said, "If history is anything to go by the markets are likely to over react, both on the upside and the downside, to news as the year progresses. Our internal investment team will continue to seek out further opportunities to deploy some of its $80 million of available cash and to trim holdings that no longer meet Milton's investment criteria.

In the meantime, Milton is reasonably fully invested with available cash representing around 3% of total assets and the portfolio is positioned to deliver a reliable and growing dividend stream over the long term."

Looking forward, the second half underlying operating profit is currently expected to be an improvement on the previous corresponding half. However, the 2017 full year result is likely to be lower than last year.

Milton has sufficient franking credits, retained earnings and liquidity to enable the fully franked, full year ordinary dividend to be maintained at 18.6 cents per share. Directors will take this and other factors into account when considering the final dividend.

ISSUED FOR: MILTON CORPORATION LIMITED

FOR FURTHER INFORMATION: MR FRANK GOOCH, MANAGING DIRECTOR

TELEPHONE: [phone] (OFFICE)

0414 675 748 (MOBILE)