The company, second only to Santos in South Australia, saw profits fall by 8.5 per cent to $125.3 million in the six months to 31 December, with investment income received from holdings in its portfolio softer on lower dividends from its interests in mining firms.

Earnings per share fell 9.3 per cent too, with the company reporting its investment performance, as measured by net tangible assets return after management costs and tax, was up by 5.6 per cent.

This is below that returned by the top 200 listed Australian companies in the half, with the S&P/ASX 200 accumulation index rising by 7.6 per cent over the six months to 31 December.

Argo Investments said its holding in Clarity Pharmaceuticals rose by 170 per cent. Another portfolio standout was Stanmore Resources which rose by 60 per cent, and both contributed positively to the company’s performance.

“However, gains were offset by negative returns from other holdings, including pathology and imaging provider Healius,” Argo said.

“In general, Australian healthcare providers have lagged due to higher costs and lower utilisation levels. Not owning Fortescue materially weighed on relative performance, as did our underweight exposure to the major banks.”

The total number of stocks in Argo’s investment portfolio decreased slightly, from 89 to 86. The company divested from its positions in Liontown Resources and Insurance Australia Group in the half. It also fully exited its position in Estia Health and Invocare – both of which because of takeover deals.

The company’s outlook for the second half follows a “remarkable rally over recent months” in global equity markets according to Argo, which said “this bullish sentiment has seen investors largely overlook consensus expectations of lower company earnings for the remainder of 2024”.

“Australia’s economic fundamentals remain solid with the outlook underpinned by strong employment and moderating inflation,” Argo said.

“This broadly positive economic picture belies the impact that price increases and higher mortgage payments are having on many consumers. As a result, we anticipate a significant dispersion in profit results this corporate reporting season, which underscores the benefit of Argo’s highly diversified portfolio.

“With a strong balance sheet, no debt and cash on hand, Argo is well positioned as we enter the new calendar year.”