On 22 October 2018, Argo Investments Ltd (ASX: ARG) announced the results of an annual general meeting (AGM). At the meeting, the chairman Mr. Russell Higgins talked about the strong financial results and continued dividend growth of the company. He also discussed the general market outlook and the Company outlook in the context of financial services industry developments. Further, the company released its full-year results on 22 October 2018, following which the share price of the company increased by 0.128 percent.
While addressing the shareholders of the company, the chairman Mr. Russell Higgins started his speech by highlighting the strong financial results of the company achieved during the year. He told that the company’s straightforward business model and proven investment philosophy have again delivered a positive outcome for the shareholders. He pointed that, for the sixth consecutive year, the company has increased annual fully franked dividends after reporting a full-year profit of $218.9 million for FY 2018.
He further added that due to the dividend increases from Macquarie Group, BHP and Rio Tinto, the revenue of the company increased by 2.3 percent. The income from interest received on cash deposits increased due to higher cash balances on hand in FY 2018, however, the income from trading and option writing has declined. Talking about the expenses of the company, he pointed that the expenses of the company increased by 1 percent and due to the company’s stronger balance sheet, the Management Expense Ratio dropped to 0.15 percent of average assets held over the year, which is significantly lower than most other actively managed products.
While talking about the continued dividend growth, he addressed the fact that providing sustainable and growing tax-effective dividend income is very important for the shareholders. He informed that the company’s board has declared an increased fully franked final dividend of 16 cents per share. While talking about the Investment performance of the company, he highlighted the NTA return of +11.0 percent for the 12 months to 30 September 2018. He also added that Argo’s NTA return underperformed the S&P/ASX 200 Accumulation Index, which returned +14.0% for the same period.
While discussing the Market outlook of the company, he informed that the Global economies are experiencing largely synchronized growth and most indicators are looking positive. The US economy is currently looking very strong as evidenced by a very tight labor market and strong business and consumer sentiment. It is expected that the current trade war could escalate further. And if the tariff or taxes are increased, it will have a negative impact on global growth.
He added further, that Australia’s economy is strengthening and is now expanding ‘above trend’. Business conditions in Australia have become more favorable due to infrastructure expenditure and increased trade supporting growth. He further pointed that the despite signs of momentum, household debt remains high and wage growth is low.
In the past six months, the share price of the company increased by 0.65 percent as on 19 October 2018. ARG’s share traded at $7.810 with a market capitalization of $5.55 billion as on 22 October 2018 (AEST 4:00 PM).
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