At Mirrabooka, we value the opportunity to engage directly with shareholders and address questions that matter most to them. During our FY25 half-year shareholder meeting, a number of important topics were raised, from the impact of shifting U.S. policy on global markets to how we uncover investment opportunities in the current volatile conditions. In this article, we’ve summarised our responses, offering insight into our current thinking and how we continue to position the portfolio for long-term value.
How does Mirrabooka navigate unpredictable global events, such as the ongoing market volatility stemming from the Trump administration’s evolving policy agenda?
The evolving policy direction under the Trump administration has added complexity to the global investment landscape and affected us locally. In our view, this is another example of a period in which predicting any near-term outcome is of no real value—nobody knows what will happen next.
Instead, we take comfort in our long-term investment approach and continue focusing on investing in companies that are resilient and can adapt to shifting markets. We look for companies with good management teams, strong competitive positions, and strong balance sheets.
When assessing situations like this, we consider two main factors: the potential impact on a company’s earnings and whether the resulting share price presents an opportunity. If we continue to have confidence in a business's long-term outlook and ability to adapt, and the share price moves to a level we believe represents good value, we may consider increasing our position.
How does Mirrabooka ensure it responds quickly when markets present opportunities?
Our role is to grab opportunities when we see them, and this means having a good understanding of a broad pool of companies and not just the ones we own. We also have processes in place that allow us to act swiftly when required and within the risk limits set by our internal guidelines, particularly where we already know the company well.
For new investments, our research process allows us to continuously monitor a range of companies we find attractive beyond those currently in the portfolio. Our investment team meets regularly with company management, attends investor briefings and conferences, and participates in site visits—this applies to both companies in our portfolio and those in which we are interested. This ongoing effort from the team allows us to build familiarity and conviction so that when an opportunity is present, we are not starting from scratch.
We believe that maintaining this depth of understanding is a key part of managing a long-term portfolio to deliver value to our shareholders.
What is Mirrabooka's approach to voting and governance issues?
We consider voting to be a critical component of our investment stewardship. All voting decisions are formally reviewed by our Investment Committee, based on recommendations from the investment team. It is an important responsibility that comes with being a long-term shareholder.
While the majority of our votes are supportive and reflective of the quality of the companies we hold, we will vote against proposals where we have concerns. For example, we have voted against a number of remuneration reports this year and, on occasion, against the election of directors where we felt it was warranted.
We do not take these decisions lightly. In some cases, we will abstain from signalling concern; in others, we will seek to engage with the company directly to understand their position or express ours. Where engagement is possible, we always prefer that route, especially when the underlying business remains strong.
There are also instances where, if concerns persist and we see a limited scope for positive change, we may consider exiting the investment. Our focus remains on being owners of quality assets and working constructively with companies to improve governance and performance over time. That is where we believe long-term value is created for our shareholders.
How do you determine when to initiate a share buyback?
We have not been active users of share buybacks in the past and have undertaken buybacks on a limited number of occasions. That said, we maintain an approved buyback in place with the exchange, as it provides us with the flexibility to act if we believe it is in shareholders’ interests.
In recent times, we have seen the discount to NTA widen to a level that is more material than we have typically experienced. As a general guideline, a discount of around 10% may warrant consideration, but this can shift depending on broader market conditions. For example, following a Dividend Reinvestment Plan (DRP) period, where shares are issued at a discount, we may look to buy back at a narrower level of around 7% to help neutralise any potential dilution to existing shareholders.
The decision comes down to capital allocation. If we see the portfolio trading at a significant discount to its underlying value and we have available cash, then buying back our shares can represent an efficient use of capital. We are mindful of market liquidity and aim to strike the right balance without disrupting regular trading activity.