Hearts and Minds Investments Limited - FY24 Financial Results and Performance Analysis
HEARTS AND MINDS INVESTMENTS LIMITED (HM1) Share Update August 2024 Tuesday 27th
Hearts and Minds Investments Limited Reports Strong Financial Performance for FY24
Hearts and Minds Investments Limited (ASX: HM1) has released its financial results for the year ended 30 June 2024, reporting significant growth in profit and net tangible assets.
Instant Summary:
- Total net investment income increased by 45% to $83.4 million.
- Profit after tax rose by 55% to $50.9 million.
- Declared a fully franked half-yearly dividend of 7.5 cents per share payable in October 2024.
- Net tangible assets per share increased to $3.09 pre-tax and $3.05 post-tax.
- Paid $9.4 million to medical research organizations and made provision for an additional $6.4 million.
Financial Performance
Hearts and Minds Investments Limited (HM1) has reported a strong financial performance for the year ended 30 June 2024. The company recorded a total net investment income of $83.4 million, a 45% increase from the previous year. This growth was driven by a robust performance in both the Core Portfolio and the Conference Portfolio.
The profit after tax for the year stood at $50.9 million, marking a 55% increase compared to the previous year's $32.7 million. The total comprehensive income after tax was $53.5 million, a slight decrease from the previous year's $63.0 million, primarily due to a significant drop in other comprehensive income.
Net Tangible Assets
The net tangible assets (NTA) per ordinary share increased to $3.09 pre-tax and $3.05 post-tax, compared to $2.90 and $2.95 respectively in the previous year. This improvement reflects the company's strong investment performance and prudent management practices.
The net asset value of the company rose from $675.5 million on 30 June 2023 to $697.4 million as of 30 June 2024. This increase was driven by total comprehensive income after tax of $53.5 million, offset by fully franked dividends paid to shareholders amounting to $32.0 million.
Dividends and Shareholder Returns
During the year, HM1 paid fully franked dividends totaling 14 cents per share. The company has declared an increased half-yearly fully franked dividend of 7.5 cents per share, payable in October 2024. This reflects the company's commitment to providing consistent returns to its shareholders.
Philanthropic Contributions
In line with its philanthropic objective, HM1 made financial contributions equivalent to 1.5% of NTA per annum to leading Australian medical research organizations. During the year, the company paid $9.4 million to these organizations and made provision for an additional $6.4 million. These funds will support important research into the prevention and treatment of chronic diseases and mental health disorders.
Investment Portfolio Performance
The investment portfolio increased by 11.7% on a pre-tax basis for the year ended 30 June 2024. This growth was driven by strong performances in technology holdings within the Core Portfolio and improved results in the Conference Portfolio. Significant gains were realized in companies such as NVIDIA, TSMC, Microsoft, Amazon, and Guzman y Gomez, which listed on the ASX in June 2024.
The Conference Portfolio also performed well, with a 15% increase over the 7-month holding period to 30 June 2024. Notable gains were realized in Bath and Body Works, Unicredit, and Resmed.
The positive financial results and strong investment performance are likely to boost investor confidence in HM1. The increase in NTA per share and the declaration of a higher dividend reflect the company's robust financial health and commitment to shareholder returns. The philanthropic contributions further enhance the company's reputation and align with its long-term objectives.
Investor Reaction:
Analysts are likely to react positively to HM1's financial results, given the significant increase in profit and investment income. The company's strategic focus on high-conviction investment ideas and its philanthropic contributions are expected to resonate well with investors. However, the slight decline in total comprehensive income may be a point of concern for some.
Conclusion:
Investors should consider the strong financial performance and strategic initiatives of HM1 when making investment decisions. The company's commitment to providing consistent returns and supporting medical research makes it a compelling investment option. Stay tuned for further updates and detailed analysis in the upcoming Annual General Meeting on 27 November 2024.