Mirrabooka Investments Ltd (ASX: MIR) is one of the larger listed investment companies (LICs) on the ASX and is one of the first to report its financials for the half-year to 31 December 2017. It’s mainly an investor in mid-capitalisation stocks and small-capitalisation stocks.
The headline figure is that profit for the first six months of FY18 was $5.5 million, which was 39.8% better than the prior corresponding period. The company attributed this improvement to the trading and options portfolios.
Revenue from operating activities was up by 1.1% to $5.1 million, this figure excludes capital gains.
Most investors are interested about the dividend when it comes it LICs. Mirrabooka’s interim dividend will be 3.5 cents per share, which is the same as last December, fully franked at 27.5%. The reduction in franking is due to current legislation but also likely comes with a reduction of the corporate tax rate.
The net asset backing per share at 31 December 2017 was $2.49, up from $2.36 at the end of the previous corresponding period.
Mirrabooka also gave some details on how the portfolio performed over the past six months and twelve months. The six-month portfolio return was 8.7% and including franking credits delivered a 10.5%. The twelve-month portfolio return was 11.7% and including franking credits the total return was 14.3%.
The LIC had $39 million of cash at the end of December, which represented 10% of the portfolio. The company said that valuations across most areas of the small and mid-cap market remain very high. The investment team will be patient deploying this cash as they need to be wary of paying extreme prices.
Mirrabooka said that it was able to deliver sound returns due to good investments like Lifestyle Communities Limited (ASX: LIC), Objective Corporation Limited (ASX: OCL), Hub24 Ltd (ASX: HUB), Alumina Limited (ASX: AWC) and Programmed Maintenance Services Limited (which was taken off the ASX list).
Mirrabooka has been one of the better performing LICs over the past decade. It could continue to be worth holding for the long-term as it has invested in growing stocks like Boral Limited (ASX: BLD) which could power the portfolio forwards from here.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.