Adelaide-based listed investment company Argo Investments today announced an 11.9 per cent increase in profit to a record $195.9 million for the year ended June 30, 2014 – the company’s highest full-year result in its 68-year history.

The company has an estimated 60,000 clients in South Australia and manages assets of almost $5 billion.

Argo is marking its unbroken run of paying annual dividends with a further 7.4 per cent increase in the final dividend to a fully franked 14.5 cents per share (up from 13.5 cents per share).

The record $195.9 million profit compared with $175.0 million in 2012-13 and $167.3 million in 2011-12, and took Argo’s earnings per share 9.0 per cent higher to 30.2 cents per share, from 27.7 cents in the previous year.

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Argo managing director Jason Beddow said the improved result reflected increased dividends and distributions from the investments in the company’s portfolio.

The result was also boosted by $6.9 million of non-cash, one-off income items.

Argo’s investment portfolio performed in line with the broader Australian share market, returning +17.1 per cent for the year after deducting all administration expenses and tax, compared with the S&P/ASX 200 Accumulation Index, which returned +17.4 per cent for the same period without taking into account any costs or tax.

Beddow said Argo spent $259 million during the year on long-term investment purchases, partly funded by $111 million in disposals and takeover proceeds.

“A feature of the past financial year has been the high level of initial public offerings (IPOs). Argo’s investment team analysed a large number of opportunities and has established positions in Affinity Education Group, Asaleo Care, Monash IVF Group, Pact Group, Steadfast Group and 3P Learning,” he said.

In its outlook, the company said low interest rates had been a key factor.

“While we acknowledge the continued improvement in the US economy, low interest rates globally have helped to fuel strong market returns,” Beddow said.

“We note that dividend payout ratios in the Australian market remain elevated. As a result, earnings growth will be required to drive further dividend growth. We also consider that earnings growth will be necessary to justify current market valuations.

“Argo has no debt and cash reserves of $195 million. We look forward to meeting our investee companies over the upcoming corporate results reporting season and will continue to selectively invest funds into quality, well-managed companies with solid cash flows and dividend streams.”