Mirrabooka Investments : Half year results Appendix 4D - 31 December 2016

MIRRABOOKA INVESTMENTS LIMITED

ABN 31 085 290 928

APPENDIX 4D STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

CONTENTS

• Results for announcement to the market

• Media Release

• Appendix 4D Accounts

• Independent Auditors Review

  This half-year report is presented under listing rule 4.2A and should be read in conjunction with the Company's 2016 Annual Report.

  RESULTS FOR ANNOUNCEMENT TO THE MARKET

  The reporting period is the half-year ended 31 December 2016 with the previous corresponding period being the half-year ended 31 December 2015. The results have been reviewed by the Company's auditors.

  Results for announcement to the market

• Profit for the half-year was $3.9 million. This is 20.4% down on the previous corresponding period. The major difference was the reduced contribution from the trading and options portfolios during the half, which showed a combined loss before tax of $11,000 compared to a gain of $1.2 million in the previous corresponding period.

• Revenue from operating activities was $5.1 million, 4.0% down on the previous corresponding period. This excludes capital gains on investments.

• The interim dividend of 3.5 cents per share fully franked, the same as last year's interim dividend, will be paid on 14 February 2017 to ordinary shareholders on the register on 24 January 2017. There is no conduit foreign income component of the dividend.

• The Company's Dividend Reinvestment Plan is in operation for the interim dividend, under which shareholders may elect to have all or part of their dividend payment reinvested in new ordinary shares. Pricing of the new DRP shares is based on a 10% discount to the average selling price of shares traded on the ASX and Chi-X automated trading systems in the five days from the day the shares begin trading on an ex-dividend basis. The last day for the receipt of an election notice for participation in the plan is 25 January 2017.

• A final dividend for the 2016 financial year of 6.5 cents per share, fully franked, and a special dividend of 5 cents per share, also fully franked, were paid to shareholders on 9 August 2016.

• Net asset backing per share as at 31 December 2016 was $2.36 before deferred tax on the unrealised gains on the long-term investment portfolio, down from $2.43 at the end of the previous corresponding period.

  Mirrabooka maintaining a strong cash position in the current market Half Year Report to 31 December 2016 Key Themes -

  • Mirrabooka invests in mid and small-cap companies with a low exposure to resource companies.

  • Recently the larger companies in the market and the resources sector have been outperforming reversing the trend of recent years.

  • Despite the recent pull back in some small and mid-cap industrial stocks, Mirrabooka's buying has been limited because we still don't see much value on offer.

  • The portfolio has been trimmed with the number of investments down to 77 from 89.

  • There is $26 million in cash, 7.0% of the portfolio, which is higher than usual. This is available for opportunities as they arise.

  • Share price has continued at a premium to the net asset backing (currently 26%).

    Result Summary -

  • Half Year Profit decreased to $3.9 million from $5.0 million, primarily because of a lower contribution from the Trading Portfolio.

  • Interim Dividend maintained at 3.5 cents per share fully franked.

  • Six month portfolio return was 4.2%, including franking it was 6.3%.

  • Five year portfolio return was 13.2% per annum, including franking it was 16.5% per annum.

Portfolio Returns

Mirrabooka is an investor in mid and small-cap companies. These sectors of the market have been dominated by two key themes recently. The first was the very strong performance of the mid and small-cap resource sectors, which were up 40.2% and 6.3% respectively over the six month period, 95.4% and 59.5% over the twelve month period, as commodity prices increased significantly in response to a more positive global economic outlook. The second was a rotation by the market out of highly priced mid and small industrial companies, many of which had been priced for perfection, back to larger companies which until recently had substantially underperformed. This move was accelerated by a number of these mid and small companies revising their previously robust profit outlook.

In this environment, Mirrabooka's short term portfolio performance was below its mid and small- cap benchmark, particularly as the Company has few investments in the resource sector.

However the longer term performance of Mirrabooka was still well ahead of its benchmark. For example, the 5 year returns including the benefit of franking was 16.5% per annum compared with the benchmark of 10.7% per annum.

Profit and Dividend

Mirrabooka's Reported Profit was $3.9 million for the six months to 31 December 2016 compared with $5.0 million last year. The decline was primarily due to the contribution of the trading and options portfolios which was a loss of $11,000 this half year versus a profit of $1.2 million in the previous corresponding period last year.

The Company maintained the interim dividend at 3.5 cents per share fully franked the same as last year.

Portfolio Changes

During the six month period Mirrabooka was able to selectively add to holdings which it believes provide quality investments at attractive prices for a long term investor. The Company also reduced the number of stocks in the portfolio, particularly where the investment case had become more risky because of high share prices or a less positive outlook.

A key feature of the market has been the large number of companies seeking to list on the ASX through IPO's. The investment team met with a number of these prospects but many did not meet Mirrabooka's investment criteria. As a result there was little participation in this area.

The most significant additions to existing holdings included Isentia Group and Iluka Resources. New companies added to the portfolio included Computershare, Carsales.com, TPI Enterprises and NEXTDC.

Major sales included ASG Group which was taken over, the complete sale of Caltex (now a top 50 company in the index) and Ardent Leisure and a reduction in the Treasury Wine Estates holding, which had become very large in the portfolio and is now also a top 50 company.

Opportunities to Invest

Following takeovers and the sale of positions in the portfolio, Mirrabooka held cash of $26.2 million, which represents 7.0% of the total portfolio, at 31 December 2016. Given recent market conditions we are very comfortable with this strong cash position. This cash provides the flexibility to add to holdings in companies, particularly those already in the portfolio, that represent quality good long term value in any market or stock specific weakness at potentially more attractive prices. However we believe at this point we can also afford to be patient.

Please direct any enquiries to:

Ross Barker Geoff Driver

Managing Director General Manager

[phone] (03) 9225 2102

16 January 2017