GuruFocus –
- Profit for the Half Year: $3.6 million, down from $4.1 million.
- Interim Dividend: Maintained at $0.01.
- Management Expense Ratio: 0.53%, up from 0.46% in 2023.
- Portfolio Value: $423 million, up from $370 million in the previous year.
- Net Tangible Assets (NTA): $1.33, with a share price of $1.175.
Release Date: January 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AMCIL Ltd (ASX:) maintained its interim dividend at $0.01 despite a decrease in profit.
- The company’s portfolio increased to $423 million from $370 million in the previous year.
- AMCIL Ltd outperformed the benchmark over six months and has consistently done so over 15 and 10 years on a grossed-up basis.
- The company focuses on quality companies with strong competitive advantages and sustainable growth potential.
- AMCIL Ltd has a low management expense ratio compared to other managed funds, with no performance fees.
Negative Points
- Profit for the half year decreased to $3.6 million from $4.1 million due to lower trading and options income.
- AMCIL Ltd is trading at a significant discount to its NTA, with a share price of $1.175 compared to an NTA of $1.33.
- The management expense ratio increased to 0.53% from 0.46% in 2023.
- The company faces challenges due to interest rates influencing asset allocators to move from equities to fixed interest.
- AMCIL Ltd has exited several positions, including CBA and Domino’s, due to concerns over valuation and business challenges.
Q & A Highlights Q: There’s been a lot of interest in data centers and private lending. Are they areas that you have a view on?
A: Gilbert Battistella, Investment Analyst: Data centers have significant long-term tailwinds due to AI demand. We have exposure through Next DC, Macquarie Technology, and Goodman Group. While the short-term outlook is strong, we are mindful of the supply response and will monitor this closely.
Q: With the wide discount, why has the share buyback stopped, and what about neutralizing the DRP by buying shares on the market?
A: Robert Freeman, CEO: The buyback is paused due to blackout periods around results. We will continue the buyback if the discount remains significant. Neutralizing the DRP by buying shares on the market is a clear strategy if the discount persists.
Q: Why would you buy an ETF if you can buy one of these funds at a 10% discount?
A: Andrew Porter, CFO: Our LICs have low fee structures and offer transparency and governance benefits. ETFs may have tax implications and lack transparency. LICs can retain profits to pay dividends during downturns, which is an attractive feature.
Q: What makes Australia an attractive place to invest, and will you include overseas companies in the portfolio?
A: Robert Freeman, CEO: Australia is attractive due to good companies and a safe market. We are open to including international stocks if they align with our frameworks. Many of our current holdings are already global businesses.
Q: Do you consider gold as a precautionary investment against market downturns?
A: Robert Freeman, CEO: We do not invest in gold as it doesn’t align with our strategy. We focus on businesses that can grow profits over time, which is more predictable than the gold market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
