Mirrabooka Investments (ASX:MIR) detailed its half-year financial results and portfolio positioning in a webcast briefing led by CEO and Managing Director Mark Freeman, with Portfolio Manager Kieran Kennedy, Assistant Portfolio Manager Stuart Low and CFO Andrew Porter presenting.
Half-year profit rose; interim dividend unchanged
Porter reported half-year profit increased to AUD 8.9 million from AUD 4.6 million in the prior corresponding half, equal to AUD 0.04 per share versus AUD 0.024 previously. He said “all aspects” of the profit and loss statement were higher in terms of income.
- Dividends up AUD 1.6 million, helped by a “special takeover” dividend from Infomedia, a larger shareholding in higher-yielding Region, and ALS paying an extra dividend in the half due to timing.
- Interest up AUD 1.0 million, reflecting higher interest rates and higher cash balances following the capital raising at the end of the last financial year.
- Trading up AUD 1.5 million, mainly linked to positions in Flight Centre and “TUI’s,” as described in the presentation.
- Options up AUD 1.4 million, largely from written options over Netwealth and Temple & Webster that expired out of the money.
The interim dividend was maintained at AUD 0.045 per share. Porter said the dividend was “entirely from capital gains,” and highlighted the LIC capital gains tax discount available to eligible shareholders, urging investors to confirm treatment with their accountant.
The management expense ratio was 0.49% for the half, with Porter noting expenses were essentially flat year-on-year and the lower MER reflected a larger portfolio following the rights issue. The investment portfolio was valued at AUD 739 million, up from AUD 668 million a year earlier, including the impact of the raising.
Portfolio underperformed sharply amid resources surge
Kennedy spent much of the briefing addressing recent performance, describing a period of pronounced underperformance versus the benchmark. He said Mirrabooka underperformed by more than 20% in calendar year 2025—an outcome he called “unprecedented” in the company’s history.
He attributed a significant portion of the relative drag to Mirrabooka’s investment style and current positioning, particularly a low exposure to resources. Kennedy said the mid-cap resources index was up more than 100% over a year and small resources up over 70%, while industrial equivalents delivered mid- to high-single-digit returns. He noted the resources component of the benchmark had risen to around a quarter of the index after the run.
Kennedy cited strong moves in gold and other commodities, but emphasized the team does not try to forecast commodity prices. He also warned that resources cycles can reverse sharply, pointing to an 82% peak-to-trough drawdown in the small resources index from 2011 to 2015 as a historical example of risk in cyclical markets.
Stock selection also weighed; conviction reiterated in key holdings
Kennedy said underperformance was not solely due to what the portfolio did not own, but also reflected the performance of several large holdings. He highlighted seven stocks that together represent about 22% of the portfolio and were key sources of underperformance during 2025, with those stocks down around 20% in a year when the benchmark rose around 20%.
Among the largest holdings, he discussed Macquarie Technology and ARB. For Macquarie Technology, he said earnings had “gone sideways effectively for a few years” as the market awaited a major data center expansion to translate into revenue. He added the team had previously trimmed the position after a strong run (after buying originally around AUD 15 and selling a “considerable amount” when the share price reached AUD 80–90) and had been buying again after the stock fell below AUD 60. Kennedy said the team’s “enthusiasm and conviction is unchecked” despite recent share price weakness.
For ARB, Kennedy referenced a recent earnings downgrade and described it as earnings volatility rather than a structural issue. He said the team was encouraged by ARB’s progress in the U.S., which he viewed as a new platform for longer-term growth.
Kennedy also addressed Equity Trustees, saying the holding faced more structural questions tied to industry conditions and its trustee role in failed superannuation products, including ASIC action. He said Mirrabooka had reduced the position by about 15% to de-risk, but was cautious about exiting a business with a strong market position based solely on negative headlines. He said the matters needed to be resolved and would have financial consequences.
New positions and portfolio activity
Low reviewed the top 20 holdings and said the list illustrated Mirrabooka’s long-term approach, with significant periods of ownership in major positions. He also outlined newer or notable positions.
Low said Channel Infrastructure, purchased in the last couple of years, had benefited from both Mirrabooka’s buying and increased market recognition, including becoming dual-listed on the ASX. He described it as a major import fuel terminal for New Zealand with strategic land and “optionality.”
He also highlighted Cuscal, an IPO Mirrabooka participated in last year, describing it as a payments infrastructure provider to regional banks and mutuals. Low said Cuscal made a “highly accretive” acquisition of competitor Indue a couple of months earlier, which prompted a significant share price reaction.
Discussing new additions, Low said Mirrabooka initiated small positions in Webjet and Flight Centre after both were sold off amid Middle East tensions, geopolitical risk, tariffs and weaker corporate travel sentiment. He said both companies had net cash balance sheets and were trading on “undemanding” valuation multiples of roughly 11x–13x PE at the time of purchase, and both later delivered positive trading updates.
He also described a renewed position in Baby Bunting under new CEO Mark Teperson, citing early evidence of improved store formats and indicating around 20% increases in like-for-like sales in new-format stores. Low said Mirrabooka viewed the refurb opportunity across a 70–80 store network as a multi-year potential tailwind.
Low said Mirrabooka also took small positions in New Zealand telematics company EROAD—framed as “option value” tied to possible expansion of road user charges—and in Wrkr, a software provider focused on superannuation payment processing that may benefit from the introduction of Payday Super in July, given increased transaction and compliance requirements.
Q&A: travel exposure, AI risks, NTA discount and sector regulation
In the question-and-answer session, Kennedy reiterated the team did not intend to “follow the trend” into mining simply because resources were performing strongly, arguing that capitulating late in a cycle can lead to poor long-term outcomes.
He also addressed Corporate Travel Management, calling the situation “particularly disappointing” and saying the team felt “let down,” while also describing the experience as being “the victim of fraud.” Kennedy said the position was about 1% of the portfolio when it entered a trading halt in the middle of the prior year, describing that as the maximum loss. He said Mirrabooka had written the position down to the value of the tax loss benefit, equating to roughly a 70% write-down, while acknowledging uncertainty around the ultimate resolution.
On AI disruption, Kennedy said the team was evaluating both how AI could change consumer behavior and how AI could affect software providers’ competitive moats. Regarding REA Group and Car Group, he said their dominance suggested disruption risk would most likely come via changes in how consumers search and interact with technology, though he noted it may take years to know whether the risk materializes. He also said the market’s focus on AI had introduced doubt into previously “fully valued” stocks, contributing to share price declines.
Asked about looking internationally for cheaper valuations, Kennedy said global investing was “on our strategic agenda” for the medium term but not an immediate plan.
On the company’s discount to net tangible assets, Kennedy said buybacks were a board matter, but added the discount was not wide enough to justify action. He also noted Mirrabooka had raised capital last year at a similar share price, and he did not see a strong case for returning capital via buybacks in that context.
Other questions touched on CleanAway’s returns and leverage (with Kennedy saying the investment thesis anticipated improvement but acknowledging performance had been “lackluster”), the risk profile of mining services companies as a proxy for resources exposure, and heightened regulatory scrutiny across parts of the superannuation ecosystem. Low said Australian Ethical had been informed of additional APRA licence conditions, adding the company believed it was compliant and that APRA’s actions related to oversight and reporting rather than financial penalties.
About Mirrabooka Investments (ASX:MIR)
Mirrabooka Investments Limited is a publicly owned investment manager. It invests in the public equity markets of Australia and New Zealand. The firm primarily invests in value stocks of small-cap and mid-cap companies, targeting companies which fall outside the top 50 listed companies, by market capitalization, on the Australian Stock Exchange. It employs fundamental analysis with a bottom-up stock picking approach to create its portfolios. The firm obtains external research to complement its in-house research.
