In its annual financial results released to the Australian Securities Exchange (ASX), Flagship recorded a 60.1 per cent increase in revenue from comprehensive activities after tax to $5.8 million.
The LIC also announced a dividend of 3.5 cents per share, up from 3.0 cents the previous year.
The value of the portfolio jumped by a third over the 12 months to 30 June 2013, Flagship stated.
Dr Pohl said the results were pleasing and a reaffirmation of the disciplined investment model at the core of the management company, as well as renewed investor interest in LICs.
“We believe interest in LICs is being renewed. This is being attributed to a growth in [self-managed super fund] investments, plus the move to fee for service by financial advisers, as well as better communication from LIC managers,” Dr Pohl said.
“But I also feel investors are becoming more active in their search for alpha and may now see LICs as preferable to beta‐producing [exchange-traded funds].”
Dr Pohl said Flagship’s investment portfolio is centred on growth companies that require less capital and meet the firm’s three criteria for investment: being a growth businesses, an acceptable return on equity, and operating cash flow that can “withstand the pressure of tough economic times”.
Dr Pohl said the firm is remunerated exclusively via performance-based fees, which he said provides greater shareholders alignment. “We believe this investor focus is crucial in ensuring the long-term success of our business, as is our focus on quality investments,” he added.
Flagship Investments Limited was listed in 1998. The investment portfolio is managed by EC Pohl & Co, which also has an effective voting interest of 27.1 per cent in Flagship Investments, Flagship stated.
Dr Pohl is the principal of EC Pohl & Co and has been the managing director and responsible for investment decisions at Flagship since the company was formed.
