COVID and the associated lockdowns left their fingerprints all over the interim result from listed investment company, Mirrabooka.
A sharp fall in dividends and other distributions in the six months to December will see the company pay a steady interim dividend of 3.5 cents a share.
The company, which is part of the group of companies linked via Australian Foundation Investment Co, said profit for the half-year was $3.4 million, down 22.8% on the previous corresponding period as dividends and distributions received from its invested companies fell 29.0%.
Revenue from operating activities was $3.3 million, 31.0% down on the previous corresponding period. This excludes capital gains on investments.
The interim results were among the first from a December balancing company.
“Volatile market conditions continued through the period due the impact of the COVID-19 pandemic and subsequent government and central bank policy responses,” directors said in the results statement on Thursday.
“This volatility was even more present in the small and mid-cap sectors of the market in which Mirrabooka invests. The long-term adjustments made to the portfolio, including a narrowing of the focus into preferred holdings with quality franchises, has been particularly beneficial through this volatility.
“Adjustments made to the portfolio though the period produced after tax realised gains of $15.3 million. In the corresponding period, last year, after tax realised gains were $11.6 million,” directors said.
“Despite the overall strength in the market, we have found opportunities to add new companies to the portfolio. NIB, Superloop and Nanosonics were purchased through temporary price weakness and Nuix was added through an initial public offering.
“The most material selling in the 6-month period has come from trimming some of the strongest portfolio performers, Objective Corporation and HUB24, and exiting our positions in Premier Investments and OptiComm, which was taken over. Selling activity has otherwise been relatively subdued as we remain confident in the stocks that we own.”
Directors said that at the end of December 2020, the company was close to fully invested and has therefore announced a Share Purchase Plan (SPP) with this result to provide additional funds for the portfolio.
The SPP is being priced at a 2.5% discount with the share price currently is around $3.26 (down 1.5% on Thursday). The SPP has a target of $40 million.
