half-yearly result to 31.12.08

Thought I'd post some comments on Argo's half-yearly result to 31.12.08 which was announced to the market 02.02.09.

After-tax operating profit (i.e. Argo's dividend income) was up to a record high of $93.8m versus $93.1m the previous year, though it was marginally down on a per-share basis (16.3cps versus 16.6cps). All good news considering the market conditions.

In calendar year 2008, Argo's portfolio returned -36.1% versus -40.1% for the All Ords Accumulation Index.

Interestingly, it was stated in the letter to shareholders:

“In view of the severity of the global financial crisis, a number of the Company’s long-term investments are having their business models challenged to the extent that we are not currently satisfied that the cost of these investments will be recovered in the future. The accounting cost base of these investments has therefore been reduced to their market value at 31 December, 2008, resulting in unrealised impairment losses after tax of $30.1 million...�

I have written to Argo asking which specific investments are thought to be unrecoverable. Will keep you posted on their response.