Listed investment company Mirrabooka has outperformed the small- to mid-cap sector although the fund still recorded a loss for the year as the value of its equities portfolio retreated in the face of the global financial crisis.
The listed fund manager posted a loss of $6.755 million and declared a final dividend of 6.5 cents per share, inline with last year's payout.
Mirrabooka shares were unchanged in morning trade at $1.58.
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It is the first listed investment company to release its full-year results this reporting season and is also the maiden earnings report from the stable of investment companies that also include market heavyweight Australian Foundation Investment Co, Djerriwarrh and Amcil.
Mirrabooka said for the 2008-09 year, its tenth year of operation, its $190 million equities holdings notched up a decline of 19.4 per cent but this was against a 27.8 per cent fall by its benchmark, the small and medium cap sector.
Mirrabooka's ten-year portfolio return performance is 8.9 per cent per annum against the combined small- to mid-cap indices of 6.9 per cent per annum.
Mirrabooka held a relatively high level of cash throughout the year, reflecting its cautious and conservative approach, although the fund has become more confident about the market's outlook and has started to selectively put some money back into the market.
At year's end, cash represented 13.1 per cent of the total portfolio.
''Mirrabooka believes current prices adequately reflect the economic recovery so we are not actively in the market on a day to day basis,'' the company said.
''Going forward, remaining cash will allow Mirrabooka to participate in attractively priced new issues which have been recently a feature of the market or in further investments in stocks that we feel match our investment criteria.''
Mirrabooka said another feature of the present market environment is a decline in dividends paid as companies sought to strengthen their balance sheets and adjust to subdued business conditions.
This slashed income for Mirrabooka, although the cut to earnings was buffeted by increased income from call writing option activities as market volatility remained high.
As a result the key underlying measure of profit used by Mirrabooka - net operating profit - was up marginally to $8.4 million from $8.3 million in 2007-08.
Under accounting standards the large fall in share market prices during the year below the cost base of some stocks in Mirrabooka's portfolio required directors to take an after-tax charge of $15.5 million to the accounting profit after tax for impairment.
As a result, the AIFRS profit after tax because of those unrealised losses was a loss of $6.755 million.
Purchases made by Mirrabooka over the last year include Alumina, OneSteel, Australian Infrastructure Fund, Crane Group, Gunns and Seek.
Mirrabooka's biggest holdings as at June 30 2009 were Nufarm, Oil Search, Healthscope, IRESS Market Technology, Alumina, Tox Free Solutions.
egreenblat@theage.com.au
The Age
