Argo sees improving conditions
Argo Investments Limited (ARG) reported a 14.7% decline in profit for the six months to 31 December 2009 to $82.7 million. The investment company said the result was despite the value of stock rising from $2.9 billion to $3.9 billion by year end, though the company had previously flagged a fall of between 25% and 28%.
Managing Director, Rob Patterson, said the result came as dividends were slashed in the face of the GFC.
“Interest income also fell significantly due to lower interest rates earned on our cash during the period,” Mr Patterson said.
Looking ahead, Mr Patterson flagged the resurgent Chinese economy as the catalyst for Australian companies to return to profit and to pay dividends again.
Despite this, the influence of the uncertain US economy would still be felt, Argo’s chairman Chris Harris said.
“The global and Australian economic data continues to support improving economic conditions, with both consumer and business confidence levels continuing to rise. However, the pace of the recovery in 2010 is uncertain, particularly in the US which has an ongoing weak housing market and high unemployment,” Mr Harris said.
Argo said its operating profit after tax and before net gains was $71.6 million, down from $93.8 million.
At 1055 AEDT, Argo shares were up 1c to $6.73.
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