Release Date: January 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mirrabooka Investments Ltd (ASX:MIR, Financial) reported a half-year profit of $4.6 million, consistent with the previous year.
- The interim dividend was increased from $0.04 to $0.045, reflecting a commitment to shareholder returns.
- The company's portfolio value increased from just under $600 million in 2023 to just under $670 million in 2024.
- Mirrabooka's long-term performance has outpaced both the mid-cap and small-cap indices, as well as the ASX 200.
- The company maintains a low management expense ratio of 0.56%, indicating efficient cost management.
Negative Points
- Dividends were slightly down, impacting overall income despite stable profits.
- The company faces challenges in finding new investment opportunities due to high valuations in the market.
- Mirrabooka's purchase activity was quieter than usual, indicating potential difficulties in identifying value buys.
- Some portfolio positions have reached valuations that question long-term conviction, leading to reductions.
- The company remains cautious due to current valuation settings, which may limit aggressive investment strategies.
Q & A Highlights
Q: Are you planning to equalize the interim and final dividends over time?
A: Mark Freeman, Managing Director: We understand shareholders prefer even dividends, but Mirrabooka's dividends often include special dividends from capital gains, which are uncertain until year-end. Therefore, a split between interim and final dividends will likely continue.
Q: What is your view on the IPO market over the next few months?
A: Kieran Kennedy, Portfolio Manager: The IPO market has been quiet despite a bullish equity market. Investment banks are eager for listings, but confidence is needed for successful IPOs. We focus on the long-term potential of businesses rather than short-term IPO success.
Q: Does Mirrabooka own Sigma, and what are your thoughts on it?
A: Kieran Kennedy, Portfolio Manager: Yes, we own Sigma. We saw value in their merger with Chemist Warehouse, which we consider one of Australia's best businesses. The stock has doubled since the ACCC approved the merger, but current prices are high, making further purchases challenging.
Q: What are your thoughts on IDP Education given its recent share price drop?
A: Stuart Freeman, Portfolio Manager: IDP Education remains a top holding despite recent challenges due to regulatory changes in student numbers. We believe it will weather the storm better than competitors due to its market leadership and focus on high-quality students.
Q: Why did you exit Domino's Pizza entirely?
A: Kieran Kennedy, Portfolio Manager: Domino's faced challenges in resetting its growth trajectory, impacting our confidence. We are monitoring the new CEO's strategies and may reconsider our position in the future.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
