Mirrabooka’s portfolio continued to deliver superior returns to investors for the six months to 31 December 2021.
Mirrabooka’s half-year results for the 2021-22 financial year, released on January 18, reflected the quality of our targeted portfolio of small and mid-sized companies. The portfolio delivered increased profit, consistent dividends, and another period of outperformance against the combined Small Ordinaries and Mid Cap 50 benchmark.
The portfolio return over the six months to 31 December 2021 including the benefit of franking was 11.1 per cent compared to the benchmark’s return, including franking, of 8.1 per cent over the same period. Our 12-month portfolio return including franking was 26.1 per cent compared to the benchmark’s 19.8 per cent. Mirrabooka also has outperformed the benchmark over five and 10 years.
Mirrabooka’s half year profit lifted to $4.2 million, from $3.4 million in the prior corresponding period, mainly driven by increased investment income as many companies lifted or reinstated dividends that had been impacted by the onset of the COVID pandemic.
We maintained our interim dividend of 3.5 cents per share, fully franked.
The portfolio over the half year benefited from strong share price performance in some of our larger holdings, including Macquarie Telecom, Mainfreight, ARB Corporation and others.
We continue to adjust our portfolio when necessary. Some company valuations have been quite high amid the current environment of low interest rates, so we adjusted our portfolio to reflect the increased valuation risk. This generated realised gains after tax of $27.7 million, up from $15.3 million in the prior corresponding period. Among our portfolio adjustments, we exited Xero and reduced our successful investments in Objective Corporation and ARB Corporation. We also initiated new positions in Computershare and JB Hi-Fi and added to our small holding in Peet.
We believe our portfolio is well diversified and offers a superior competitive advantage and attractive potential for growth when compared to the broad market index.
Looking ahead, we are focusing on the ability of our investments to respond to potential supply pressures and elevated inflation caused by COVID disruptions. High valuations in some stocks present a potential short-term headwind, but in the medium to longer term, which is our preferred investment horizon, the diversity and quality of our portfolio gives us confidence in our ability to continue to provide our investors with attractive returns.