Argo Investments (ARG) H1 2025 earnings summary

Executive summary

• Net profit for the half-year ended 31 December 2024 was $121.2 million, with EPS down to 15.9 cents per share and a record fully franked interim dividend of 17.0 cents per share, totaling $129.8 million, payable 14 March 2025.

• Portfolio investment revenue increased due to higher-than-expected and special dividends, though trading and other income declined, resulting in lower profit year-over-year.

• NTA per share rose to $10.01 at 31 December 2024, up from $9.33 a year earlier and $9.61 at 30 June 2024.

• Additional capital of $25.1 million was raised via DRP and DSSP, offset by a $7.5 million on-market share buyback.

• Investment outperformance for calendar 2024 was +11.7% NTA return after costs and tax, beating the S&P/ASX 200 Accumulation Index's +11.4%.

Financial highlights

• Income from operating activities fell 3.4% year-over-year to $134.4 million, while revenue (dividends received) rose to $137.5 million.

• Total comprehensive income for the half-year was $348.8 million, up from $292.5 million, driven by revaluation of long-term investments.

• Cash and cash equivalents at period end were $73.4 million, down from $97.2 million at 30 June 2024.

• Net operating cash inflows were $122.5 million, down from $146.4 million in the prior period.

• Management expense ratio remained steady at 0.15%.

Outlook and guidance

• Directors declared an interim dividend of 17.0 cents per share for the year ending 30 June 2025, payable 14 March 2025.

• Market volatility is expected to persist due to the new US administration's policies, but the domestic outlook is optimistic with moderating inflation and expectations of an interest rate cut.

• No material events or changes in outlook have occurred since 31 December 2024.

• Portfolio is positioned to benefit from US dollar revenue exposure.

• Focus remains on earnings outlook during the February reporting season.