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Listed investment company Mirrabooka Investments (ASX: MIR) has posted a 63.6 per cent jump in full-year net profit to $13 million despite its portfolio delivering a return of negative 10.8 per cent, dramatically underperforming its benchmark in what the company described as one of the most challenging periods in its 27-year history.
The unaudited result for the year to 30 June 2026 was driven by higher investment income of $13.4 million, up from $10.7 million in FY25, as well as a stronger trading portfolio contribution of $1.4 million and a sharp rise in options income to $2.1 million from just $0.6 million a year earlier.
Revenue from operating activities rose 36.1 per cent to $15.5 million.
The earnings lift stands in stark contrast to the portfolio's performance with Mirrabooka's negative 10.8 per cent return, including franking credits, well behind the combined S&P/ASX Mid Cap 50 and Small Ordinaries benchmark return of 7.8 per cent over the same period.
Mirrabooka points out that it has a 27-year history of investing in the small and mid-cap market in Australia and New Zealand and since inception, the portfolio, including franking, has returned 11.6 per cent per annum, ahead of both the benchmark at 8.5 per cent and the S&P/ASX200 at 9.8 per cent per annum.
"However, the 2026 financial year on a relative basis, has proved to be one of the more challenging periods in Mirrabooka’s history given the very large divergence of returns across sectors as momentum and short term investment themes drove many parts of the market higher," says the company.
"Mirrabooka has minimal exposure to mining companies. Given the earnings and share price volatility common in small and mid-cap miners, and their limited durable competitive advantages, we have consistently chosen to invest elsewhere.
"This positioning was a major contributor to the year’s underperformance."
The mining sector surged during the year with the mid-cap resources index returning 68.5 per cent and small resources returning 30.7 per cent.
Mirrabooka says a key drag on returns was also the valuation de-rating of several higher-growth holdings, particularly in technology-related businesses including CAR Group, REA Group, SEEK, Life360 and SiteMinder.
"Heavy investment in artificial intelligence by large US technology companies has increased perceived disruption risk and driven a rapid global de-rating of technology stocks," says the company.
"Given the challenge of producing clear nearterm evidence to counter these concerns, stocks in this area of the market may continue to trade at lower valuations for now."
Net tangible assets per share fell sharply to $2.82 from $3.32 a year earlier, reflecting the portfolio's weak returns, while realised gains after tax came in at $20.4 million, down from $26.5 million in FY25.
During the year Mirrabooka exited positions in IDP Education and Corporate Travel Management, the latter following accounting irregularities at the travel company.
Despite the portfolio headwinds, the company lifted total dividends to 14c per share fully franked, up from 11c in FY25.The payout includes a 3c special dividend.
Based on the 30 June share price, Mirrabooka cites a grossed-up dividend yield of 6.4 per cent on ordinary dividends and 8.1 per cent including the special dividend.
The results come amid a broader period of modest returns for the Australian market, with the ASX rising 3 per cent over FY26 as the Reserve Bank held the cash rate at 4.35 per cent and geopolitical tensions including Middle East conflict weighed on sentiment.
Mirrabooka also underwent a leadership transition during the year when the company announced in February this year that long-serving CEO Mark Freeman would retire at the end of FY26, with Alison Gibson succeeding him from July.
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