Argo Investments posts 8.5% profit drop

The news: Argo Investments reported a 8.5% decline in half-year profits owing to reduced investment income received from trading investments in the firm's portfolio.

The numbers: The Adelaide-based investment company saw profit for the half-year ending December decrease to $125.3 million on the previous corresponding period, and earnings per share fall 9.3% to 16.5 cents per share. Argo said $26 million of additional capital was raised for investment from the firm's Dividend Reinvestment Plan over the six months.

The context: Argo's holdings in Clarity Pharmaceuticals and Stanmore Resources contributed positively to its half-year performance. However, gains were offset by negative returns from other holdings, including pathology and imaging provider Healius. Argo said that in general Australian healthcare providers have lagged due to higher costs and lower utilisation levels. Meanwhile, not owning Fortescue Metals shares, coupled with its underweight exposure to the major banks, was deemed to have "weighed heavily" on relative performance.