Australian funds and listed securities trading platform Argo Investments [ASX:ARG] released a record fully franked interim dividend.
Profit went up 6.2% on half-year December 2021, to the total of $137 million, pushing earnings per share up 2.2% to 18.2 cents.
Even with the improvements posted by the company, its share price still fell 2.5% early afternoon.
The ARG share was trading for $9.41 each at time of writing, having raised more than 5% so far in the first weeks of 2023:
www.tradingview.com
Argo Investments enjoys higher profits 1H FY23
The investments company announced its financial results comparing the half year ending December 2021, with the half year just ended, December 2022.
The company reported an interim profit of $137 million for the latest six-month period, an increase of 6.2% on the same period the year before, as well as an interim dividend of 16.5 cents a share fully franked.
In half-year 2021, the company had earned $129 million in profit, and earnings per share had hit 17.8 cents each.
Now, with the $137 million in profit, earnings per share have also managed to boost 2.2%, going from 17.8 cents to 18.2 cents.
The company said that profit had increased mostly on higher investment income, which was received from companies in Argo’s existing portfolio and dividends continuing to balance out after bottoming in the pandemic.
ARG commented that income from ordinary dividends did increase, but there was a sharp fall in special dividends as companies failed to repeat one-off, post-COVID capital returns.
Trading activities were noted as higher during the latest half year, despite no new stocks being added to the portfolio and its holdings declining slightly.
Argo’s investment performance, as measured by net tangible assets return after management costs, was 5.6% for the latest reporting period, which has been lower compared to the S&P 200’s Accumulation Index return of 9.8%.
ARG on navigating a challenging economy
The company acknowledged the current volatile environment and said that its investment approach works best for companies that grow income on sustainable basis over time rather than for cyclical businesses, such as mining stocks susceptible to fluctuating commodities prices and absent dividends.
ARG believes its underperformance in comparison to the wider share market was due to impacts of underweight exposure to the resources sector, especially coal and lithium companies that have seen share prices soaring more than 100%.
The group went on to praise the Australian economy’s performance, attributing higher commodity prices and strong energy and battery commodities, along with low unemployment rates and an excess of savings to a softer impact of inflation.
Under its own microscope, Argo believes spending and investments will lessen, however the re-entering of China’s economy should lend some promise.
ARG anticipates ongoing dispersion in the share market and will lean on the diversified nature of its portfolio, as well as conservative strategies, to keep itself secure as the present climate rages on.
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Regards,
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For Money Morning
