Mirrabooka Investments lifts profit 24pc

Stakes in Treasury Wine Estates and Mayne Pharma boosted Mirrabooka’s annual result.

Mirrabooka Investments has boosted annual profit by 24 per cent with help from stakes in Treasury Wine Estates and Mayne Pharma, but the listed investment firm expects markets to be volatile for the foreseeable future.

“Heightened volatility is likely to be widespread in markets for the foreseeable future given economic and political uncertainties,” Mirrabooka said on Wednesday.

Mirrabooka on Wednesday booked a net profit of $8.8 million for the year ended June 30 -- up from $7.1 million a year earlier.

Profit was boosted by dividend income and a rise in the contribution from the company’s trading portfolio, in which stocks are held for the short term. Mirrabooka said big companies on the share market were affected by growth concerns and market volatility throughout the 2016 financial year. However, small and mid-cap companies with good growth prospects in attractive industry segments generated strong share price performance.

Mirrabooka said Treasury Wine Estates, Netcomm, iProperty, Vocus Communications and Mayne Pharma made significant contributions to the performance of its portfolio.

New stocks added to the portfolio included Mainfreight, OzForex Group, Navitas, ASG Group, Ardent Leisure Group, and Australian Agricultural Company. Mirrabooka sold out of iProperty Group, Broadspectrum and Veda Group, which were all taken over, and Blackmores, James Hardie Industries and Tassal Group, among others.

Mirrabooka’s total portfolio return, including dividends and franking credits, was 15.4 per cent but was lower than the return of 17.2 per cent from the combined small and mid-cap market index benchmark.

Mirrabooka said the return from its portfolio was lower than the benchmark because it was not a large investor in the small to mid-cap resources sector which experienced a strong rebound near the end of the financial year. But over five years, Mirrabooka’s portfolio had generated returns of 14.9 per cent a year compared to the benchmark’s returns of 6.4 per cent.

Mirrabooka held $21 million in cash at June 30, 2016, which the company said positioned it well to pursue opportunities.

But given current conditions, the company was also comfortable holding that level of cash.

Mirrabooka will pay a final dividend of 6.5 cents per share, fully franked, plus a special dividend of 5 cents per share.

AAP