The stunning 25 per cent rise in the Australian stockmarket has produced a sharp rise in earnings for the Goldman Sachs JBWere-associated listed investment company, Mirrabooka Investments.
It became one of the first June 30 balancing companies to report yesterday and told the market that net profit rose 20.1 per cent in 2006-07, on the back of that boom on the market.
MIR invests in the small and medium cap companies, with a few larger ones thrown in. Its portfolio jumped sharply over the year.
MIR shares rose 2cyesterday to $2.42, 8c under the all time high of $2.50 and up around 30 per cent over the financial year.
Mirrabooka reported a 20.1 per cent rise in annual profit for 2007 to $24.51 million on the back of a 43.6 per cent return from its portfolio of small and mid-sized stocks.
"We expect positive conditions to persist, although we are certainly not expecting a repeat of the extraordinary returns provided by the small and mid cap sectors," chairman Terry Campbell said.
Operating profit after tax was $9.9 million, 36.4% up from the previous corresponding period, net operating profit per share was 8.52 cents, up 35.9% from 6.27 cents the previous corresponding period.
"Net profit (including realised capital gains on investments) was $24.5 million, 20.1% up from the previous corresponding period. Revenue from operating activities (excluding realised capital gains on investments) was $11.1 million, 22.4% up from the previous corresponding period.
"The final dividend of 6.5 cents per share fully franked, up from last year's final dividend of 4 cents, will be paid on 2 August 2007 to ordinary shareholders on the register on 20 July 2007.Shares are expected to trade ex-dividend from 16 July 2007.
"The final dividend includes an attributable 3 cents of Listed Investment Company (LIC) gain. This gain enables some shareholders to claim a tax deduction in their tax return. Further details will be on the dividend statements.
"Net asset backing per share before the provision for deferred tax on the unrealised gains in the Company's investment portfolio as at 30 June 2007 was $2.69, up from $1.94 at the end of the previous corresponding period."
The company said the value of the portfolio at June 30, 2007 was $317.8 million, including cash of $5.3 million. Management expense ratio on an annualised basis was 0.91% (0.87% in 2006).
The major sales of holdings which have been subject to takeover activity were Baxter Group, DCA Group, Vision Systems (convertible notes), GroPep and Excel Coal.
Other major sales from the portfolio were Centennial Coal, Macquarie Airports, Transurban Group and Colorpak Limited. In total, realised gains produced $19.4 million before tax.
The larger investments new to the portfolio during the financial year were:
•Asciano Group (as a result of its spin off from Toll Holdings), a transport infrastructure business.
•Energy Developments, a provider of renewable energy.
•Fletcher Building operates in building products, concrete, steel, construction, property and housing and distribution.
•Boart Longyear (as a result of participating in this IPO), an integrated drilling services provider and products manufacturer for the mineral industry.
•Macquarie Leisure Group, property development and investment group, with investments in leisure and entertainment assets in Australia.
•PaperlinX, manufacturer and distributor of communication and high performance packaging papers.
•Automotive Holdings, automotive retail and logistics group.
•Queensland Gas, focused on becoming an integrated energy supplier in Australia based on coal seam gas resources.
•InvoCare, private provider of services related to funerals, burials and cremations.
•Transpacific Industries (as a result of the takeover of Baxter group), provides integrated industrial cleaning and waste management solutions
"We also added to our existing holdings in the Australian Infrastructure Fund, Dyno Nobel, Fleetwood Corporation and Regional Express during the period," the company said.
