Argo Investments lifts HY profit despite poor portfolio returns
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The news: Argo Investments has increased its first-half profit by 7.9% to $130.8 million, with investment revenue flat year on year, as the listed investment company pointed to an "extremely unpredictable" investing environment during the six months to December.
The numbers: The company reported earnings per share of 17.2 cents, up from 15.9 cents in the prior corresponding period. It declared an interim dividend of 18.5 cents per share, up from 17 cents a year earlier.
Argo returned 1.4% on its investment portfolio during the period, lower than the S&P/ASX 200 Accumulation Index's 3.6% rise.
The company attributed this to its underweight exposure to gold stocks, which had a -1.5% effect on relative performance.
The context: Argo said economic and market forecasting is "exceptionally challenging" in the current climate. The outlook is "highly uncertain", it noted, with Australian shares "susceptible to a range of largely offshore forces".
Argo made purchases in CSL, Amcor, Worley, Rio Tinto, BHP and Clarity Pharmaceuticals during the first half, and establish a new position in Generation Development Group. It made sales in Reece, Wesfarmers, Lynas Rare Earths, Eagers Automotive and Brambles, and fully exited its positions in Healius and GPT Group.
What they said: "In this rapidly shifting investment landscape, with a higher-than-usual degree of unpredictability, we believe the most prudent approach is broad diversification across the economy," the company said in its outlook statement.
"Argo's portfolio of over 80 Australian listed companies spans multiple industries, with reliable earnings generated both domestically and offshore."
The source: ASX
