South Australian listed investment company Argo Investments has recorded an above-$100 million half-year profit for the first time.

Argo today announced an increased fully franked interim dividend following a 18.1 per cent improvement in profit to $101.9 million for the opening half of the 2013-14 financial year.

The higher fully franked interim dividend of 13.5 cents per share compares with a fully franked 13 cents per share in the previous corresponding period and follows the increased final dividend paid last year to Argo shareholders.

The company also announced its Chief Executive Officer Jason Beddow has been appointed to the board as managing director.

The Chairman of the Board, Ian Martin, said “Jason joined Argo 13 years ago and has been chief executive officer since 2010. In that time, the company has performed well and we are delighted to formally appoint Jason to the board today.”

Beddow said the company had received increased dividends and distributions from the investments in its portfolio, partially offset by a slight decline in interest income on cash deposits, due to the lower interest rates available during the half-year.

The result was boosted by $6.9 million of non-cash, one-off income items, being two demerger dividends resulting from the demergers of Recall Holdings and Orora by Brambles and Amcor respectively, and a special dividend of Sydney Airport securities by Macquarie Group to its shareholders.

The number of stocks held in the Argo portfolio increased to 103 during the half-year after a sharp increase in initial public offerings (IPOs) coming to the market.

“The December quarter was the second highest quarter of IPO issuance in Australia since the global financial crisis and Argo’s investment team analysed a large number of opportunities,” Beddow said.

“Although we only participated in a small number of IPOs, as most were considered to be fully priced, long-term positions have been added to the portfolio in Affinity Education Group, Pact Group and Steadfast Group.”

Beddow said the global economic outlook was showing signs of improvement, particularly in the U.S. where recent economic data has encouraged the Federal Reserve to begin tapering their monetary expansion program.

“In contrast, the Australian economy appears fragile, with unemployment edging upwards as the economy shifts from the resources boom to a more balanced growth profile. Over time, the stimulatory effects of lower interest rates and a more competitive exchange rate should kick in, but economic growth is likely to remain sluggish through this transition phase,” he said.

“With the average dividend payout ratio of companies in the S&P/ASX 200 Index approaching the higher end of its historic range, at around 75 per cent, we believe earnings growth will be required in order to drive further dividend growth.

“Within this framework, we expect only limited earnings and dividend growth from Australian companies in the coming year. However, we believe the overall yield available in the Australian equity market remains relatively attractive.”

Argo reported that it has no debt and cash reserves of $195 million.