Release Date: July 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mirrabooka Investments Ltd (ASX:MIR, Financial) achieved a profit of $10.7 million, despite a slight decrease from the previous year.
- The company declared a normal dividend of $0.065 and a special dividend of $0.025, totaling $0.13 for the year.
- Management expense ratio (MER) decreased to 0.56% from 0.59%, indicating improved cost efficiency.
- The company generated nearly $2.5 million from options trading, an unprecedented contribution.
- Mirrabooka Investments Ltd (ASX:MIR) has consistently outperformed benchmarks over 1, 3, 5, and 10-year timeframes.
Negative Points
- Profit for the year decreased from $11.3 million to $10.7 million.
- The trading portfolio did not perform as strongly as the previous year, impacting overall profit.
- The company had to trim positions in some of its top holdings due to high valuations, which could affect future growth.
- The share price of IGO, a new addition to the portfolio, halved since purchase, indicating potential misjudgment in timing.
- Mirrabooka Investments Ltd (ASX:MIR) is trading at a small discount, which is common in the LIC market but still a concern.
Q & A Highlights
Q: Did Mirrabooka participate in the recent government float?
A: No, we did not. While we considered it, the float was narrow with limited new shares issued, and we would need to see a price adjustment before considering it for our portfolio. - Kieran Kennedy, Portfolio Manager
Q: Is management comfortable with the risks of moving down the quality spectrum in recent portfolio changes?
A: We continuously evaluate this. While we have trimmed some high-quality holdings, we still maintain significant positions in them. Our long-term outlook on these businesses remains strong, and we believe this strategy helps navigate market volatility. - Kieran Kennedy, Portfolio Manager
Q: Are directors considering raising more capital through a share purchase plan?
A: While share purchase plans are always discussed, no formal decision has been made. We consider market opportunities and the optimal size for Mirrabooka to ensure the best performance. - Mark Freeman, Managing Director
Q: Does Mirrabooka still hold Domino's Pizza shares?
A: We have reduced our position in Domino's Pizza due to recent earnings misses and challenges in multiple global markets. We continue to monitor the situation but acknowledge the significant work needed to get back on track. - Kieran Kennedy, Portfolio Manager
Q: Has Mirrabooka considered share buybacks?
A: We have an ongoing facility for buybacks but would only act if there was a significant discount. Currently, with the share price around NTA, buybacks are not a priority. - Mark Freeman, Managing Director
Q: Can you elaborate on the success of the option trading strategy this year?
A: Our option strategy involves writing call options on large holdings we consider reducing. This has provided additional income and is a low-risk strategy aligned with our overall portfolio management. - Kieran Kennedy, Portfolio Manager
Q: What is the outlook for Gentrack, and how long does Mirrabooka plan to hold it?
A: We are encouraged by Gentrack's potential in large global markets. Despite its significant run-up, we see substantial growth opportunities and plan to hold it for the long term. - Kieran Kennedy, Portfolio Manager
Q: Is Mirrabooka considering adding to its position in IGO given the recent share price drop?
A: No, we are not planning to add significantly to our IGO position. While it appears to offer better value now, we prefer to maintain a diversified portfolio with less exposure to resource companies. - Kieran Kennedy, Portfolio Manager
Q: Has the Holiday NPC been sold, and are the proceeds being used for dividends?
A: No, the Holiday NPC has not been sold. We prefer to hold it through to get the full return rather than selling in advance. - Kieran Kennedy, Portfolio Manager
Q: Can the US strategy deliver long-term growth for ARB Corporation?
A: We are optimistic about ARB's US strategy, especially with their relationships with large car manufacturers. We will focus on their progress in the US market in our upcoming discussions with the company. - Kieran Kennedy, Portfolio Manager
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
