MIR - Mirrabooka Investments

[Dona Ferentes]

Half yearly out. Performance has been subdued (to say the least) but still trading above NTA

Dividend maintained at 3.5c ff, sourced from gains

New purchases include Ardent Leisure Group, Tourism Holdings and Vista Group as well as building on existing holdings in EQT Holdings, Seek, Fisher & Paykel Healthcare and EVT. Encouragement has also come from strong earnings and share price results from recent portfolio additions in IPD Group and Gentrack. We also trimmed positions in IRESS, NEXTDC and Computershare through the half year, with the latter experiencing a very strong rise in its share price since being purchased.

 

[Belli]

Dividend maintained at 3.5c ff, sourced from gains

5c per share grossed up for LIC Capital Gains Discount.

I note the entire half-year profit of $5.671m has been transferred to Retained Profits and, as has pointed out, the dividend is entirely sourced from the Realised Capital Gains Reserve.

DRP and BSP will be at 2.5% discount to VWAP

PS: On quick numbers, despite the dividend remaining the same as the pcp, it still provides me with a modest income increase of 5.1% due to holding more of the blighters. Cannot complain really.

 

[Dona Ferentes]

Mirrabooka has been trading at or close to NTA of late , first time in quite a few months.

Value has been out of favour for a while, as have small caps; with mean reversion and all that, I may be looking to add before July Annuals. Until then, cash it is.

 

[Belli]

ARG pays its dividend this Friday so some of it has gone into MIR this morning. As always I feel a need to not having all my funds in banks and mining, so my MIR holding goes some way to mitigating this.

 

[frugal.rock]

I thought it deserves a chart update.

 

[Belli]

Over the last few years MIRs dividends have been sourced from Capital Gains which I find interesting. As this is not included in the EPS, some find it confusing when attempting to work out the payout ratio. This can also happen with the older LICs too.

 

[Dona Ferentes]

Over the last few years MIRs dividends have been sourced from Capital Gains which I find interesting.

I notice Mirrabooka has sold down quite a few holdings, possibly even exiting completely, judging by recent Top 20 changes. Absent from the latest compilation that were in the rankings a few months ago are IRR, PNI, NAN, CWY, CTD and PXA. There may be others.

With MIR due to report this week, there may be a significant LIC capital gain included, a handy deduction for some taxpayers.

And trading below the latest NTA at present.

 

[Belli]

Good observations there @Dona Ferentes. It seems MIR's NTA increased by approx 4% from May to June according to my back of the envelope calculations. A slight correction on the reporting date though as it reports next week on 18 June.

 

[Dona Ferentes]

I notice Mirrabooka has sold down quite a few holdings, possibly even exiting completely, judging by recent Top 20 changes. Absent from the latest compilation that were in the rankings a few months ago are IRR, PNI, NAN, CWY, CTD and PXA. There may be others.

* IRE Iress, not IRR. A bit freudian

Yep, 18 Jul. Thanks

 

[Dona Ferentes]

]It seems MIR's NTA increased by approx 4% from May to June according to my back of the envelope calculations. A slight correction on the reporting date though as it reports next week on 18 July

That's been me, buying. (Lol... in part, at 2.72 and 2.73) A bit of cash floating around as I need to make minimum pension.

 

[Dona Ferentes]

> Net Profit attributable to members was $11.3million, up 68.2% on the previous corresponding period.
> Net profit per share was 5.92 cents, up 57.4% on the previous corresponding period.
> Revenue from operating activities was $11.8million, up 13.7% on the previous corresponding period.
> The final dividend of 6.5 cents per share fully franked, the same as last year, and a special dividend of 4.5 cents per share, up from 2.0 cents last year (also fully franked) will be paid on 17 August 2023.
> The interim dividend for the 2023 financial year was 3.5 cents per share fully franked (the same as last year).
> Total dividends for the year per ordinary share are therefore 14.5 cents, up from 12 cents last year.
> The entire 6.5 cents of the final dividend and the 4.5 cents special dividend are sourced from capital gains, on which the Company has paid or will pay tax. The amount of the pre-tax attributable gain, known as an “LIC capital gain”, attached to this dividend is 15.7 cents. This enables some shareholders to claim a tax deduction in their tax return.

 

[Dona Ferentes]

Of our most material purchases OFX (foreign currency provider to business and consumers), Ardent Leisure Group (Dreamworld theme park and significant cash holdings) and Vista Group (cinema software provider) were bought back into the portfolio following prior investment some years ago. This is not uncommon for us, as we actively meet with and follow many companies that we currently don’t own or we may have previously sold, looking for value opportunities in businesses with sufficient quality and run by management that we trust.
Other material new additions were in Tourism Holdings (dominant campervan rental and sales business in Australia and New Zealand) and Lynas Rare Earths (largest producer of rare earths outside of China).
Our largest purchase overall was adding to our existing holding in IDP Education. Our assessment is that concern over recent regulatory increases in competition in their English Language Testing business has provided a buying opportunity for the compelling prospects it has as the global leader in placing international students in universities in Australia, Canada, the UK and the US.

Our most material sales saw the disposal in full of long-standing holdings IRESS, InvoCare (including into a takeover offer), NEXTDC and Ansell. In these instances, we observed a maturing business profile making future growth and return on capital look less compelling.We also sold our successful investment in Oz Minerals into a takeover offer by BHP.

 

[Belli]

Appreciate the write up @Dona Ferentes. It'll be a very healthy amount hitting the account in August.

 

[Belli]

I notice from the accounts that, similar to last year, the entire profit (after tax) of $11.31m has been moved to Retained Profits. Means nothing really but there is the feeling the management is squirrelling funds away just in case. No objections to that approach from me.

Must remind myself to at least reinvest the special dividend amount. I view those as a windfall not to be squandered.

 

[Dona Ferentes]

From the accounts that, similar to last year, the entire profit (after tax) of $11.3m has been moved to Retained Profits. Means nothing really but there is the feeling the management is squirrelling funds away just in case..

Mirrabooka is paying out a fair amount, each half, as asset sales seem to be a significant aspect of the portfolio. Do you think a cap raising is likely, to boost AUM?

And the full list of New Companies added to the Investment Portfolio
OFX Group
Tourism Holdings
Lynas Rare Earths
Ardent Leisure
Vista Group
Ampol
Redox (IPO)
Port of Tauranga
Task Group
Dropsuite
LGI (IPO)

A common approach by MIR, as mentioned in their reports, is to take a smallish holding at first and add as time progresses.

 

[Belli]

Mirrabooka is paying out a fair amount, each half, as asset sales seem to be a significant aspect of the portfolio. Do you think a cap raising is likely, to boost AUM?

And the full list of New Companies added to the Investment Portfolio
OFX Group
Tourism Holdings
Lynas Rare Earths
Ardent Leisure
Vista Group
Ampol
Redox (IPO)
Port of Tauranga
Task Group
Dropsuite
LGI (IPO)

A common approach by MIR, as mentioned in their reports, is to take a smallish holding at first and add as time progresses.

A good thought. I hadn't considered the possibility of a capital raising. MIR has offered an SPP in 2021 and 2022. Before that there was one was in 2015.

It has renewed the $10m facility with the CBA which remains undrawn plus it holds $23.3m in cash (as at 30/6.) For an LIC on the smaller side it seems it has relatively sufficient access to funds without the need to approach shareholders. Having said that, I am usually wrong with my guesses on what the LICs I hold will do which is why I tend not to make them.

 

[Dona Ferentes]

Must remind myself to at least reinvest the special dividend amount. I view those as a windfall not to be squandered.

Very pertinent, Mr B. Otherwise, the holding is not accumulating/ growing

 

[Belli]

Very pertinent, Mr B. Otherwise, the holding is not accumulating/ growing

It can also be done through DRP/DSSP arrangements. I believe the formulae to calculate the number of shares to participate in either plan or combination thereof would be (number of shares held x special dividend amount)/total dividend amount.

Happy to be corrected if I am wrong.

 

[Belli]

I checked MIR's announcements and am pleasantly surprised it is to report its half-yearly results on 18 January.

Even better it is the day after Vanguard fills the coffers again.

 

[Dona Ferentes]

I checked MIR's announcements and am pleasantly surprised it is to report its half-yearly results on 18 January.

Even better it is the day after Vanguard fills the coffers again.

will MIR surprise with more than 3.5c a share distribution? The 'specials' are usually announced in July.