Profit fall but Mirrabooka confident
Influential listed investment fund Mirrabooka is confident of long-run returns from the Australian market despite record lows in business confidence and an expected rise in unemployment next year.
Mirrabooka's portfolio returned 18.9 per cent in the year to June 30, compared with the 4.8 per cent rise in the benchmark combined small and midcap market index.
Its net profit for the year was $10.3 million, down 19.7 per cent on the previous year of $12.8 million.
However, managing director Ross Barker said he was pleased with the fund's portfolio return and was not concerned by the profit decline.
"The reason why the [fund's] profit fell was that one of the companies in which we invest, called Hastings Diversified Utilities Fund, had a huge rise in the 2012 year and it didn't rise as much in 2013," Mr Barker said.
"But it's the only thing we invest in that goes through the profit and loss statement. Everything else goes through the balance sheet in terms of its revaluations, so it's a bit of an accounting aberration."
Mirrabooka generates most of its earnings from dividends paid by the companies in which it holds shares.
The fund's net operating result, which measures the underlying income generated by the portfolio, was down slightly to $8.3 million, from last year's $8.4 million.
"That's a reflection of the fact that companies haven't had strong profit growth, so they haven't been lifting their dividends," Mr Barker said.
"But we got about 6¢ per share out of our operating earnings, and as a result of the sales we've made, particularly the sales of ... we've supplemented that with capital gains on things we've sold so that helps with our dividend."
The best-performing stocks in Mirrabooka's portfolio over the year were REA Group, Austbrokers Holdings, Tox Free Solutions, Australian Infrastructure Fund and InvoCare.
It also added several new companies to its portfolio, including Bega Cheese, Brickworks, BlueScope Steel, Ingenia Communities Group, Horizon Oil, Seek and Vocus Communications, as well as a major addition to its existing investment in Toll Holdings.
The interim dividend for the 2013 financial year was 3.5¢ a share, fully franked, which was the same as last year, and it was paid to shareholders on February 12.
The final dividend of 6.5¢ a share, fully franked, the same as last year, plus a 5¢-a-share special dividend, also fully franked, will be paid on August 9, 2013, to shareholders on the register on July 31, 2013.
Shares are expected to trade ex-dividend from July 25.