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MIR six monthly report out. More of the same.  Paying a 3.5c ff dividend. Performance satisfactory, above benchmarks.

 

Portfolio Changes 

 We have continued to assess the medium to long term earnings outlook for companies under our investment consideration. In recent times, we have been factoring in an increasing interest rate outlook in assessing the appropriate valuation to apply to these earnings. 

 This valuation focus saw us exit Xero, which is now a 50 Leader Index stock, as well as reducing our very successful investments in Objective Corporation and ARB Corporation. Qube Holdings and Tassal Group were the other material sales, both positions exited after long holding periods, as we view their prospects for growth as having matured. 

 Several new positions were initiated during the half year:  

•  Computershare was reintroduced into the portfolio in the early months of the financial year, before market interest rate expectations began to increase. It is a high-quality business that is relatively mature, but we felt that the market was mispricing the very significant benefit that even modestly higher interest rates would have on its earnings.  
•  JB Hi-Fi was purchased as we felt that a short term market focus on a likely moderation in sales was providing an attractive opportunity to purchase the market leader in the home electronics category, where product innovation continues to provide a long term spending tailwind. 
•  Peet was an existing small holding, that we added to, as we view its residential landbank as being undervalued by the market. 
• We also participated in the Lark Distilling Co capital raising, which supported its purchase of strategically important whisky distillery assets in Tasmania. 

Other smaller additions were Santos (as a result of the merger with Oil Search) , Bapcor, Deterra Royalties. Worley. IPD Group plus The Environmental Group