Good morning, ladies and gentlemen, shareholders. My name is Annabelle Chaplain, and it's my pleasure on behalf of Chris Mackay and our team in the room and online to welcome you to this Results Briefing for Full Year Financial Year 2025. I note we have shareholders attending in the room and online. For those of you, particularly online, there is a very important slide about to come up around that we give no assurances on future statements, etc. I also take the opportunity to acknowledge the traditional owners of the land on which we meet, and I pay my respects to Elders past and present.
The format for this update will be focused squarely on sharing the final results for 2025, drawing out the highlights, and as part of that, I'll speak to why and how we are changing. We will then invite questions from shareholders, and we'll be happy to answer those questions. To our business overview, as a refresh, a few points on who we are, what is our purpose, and how we go about it. MFF is one of Australia's leading investment companies. Our unwavering goal from the beginning has been to build lasting wealth for shareholders through the ownership of advantaged businesses. Our active, unconstrained approach to compounding shareholder capital is centered on disciplined capital allocation. We take a medium to long-term view and focus capital on a portfolio of businesses that offer attractive combinations of quality and value.
The success of this model is highlighted by the growth in net assets from approximately AUD 412 million in 2013 when MFF adopted its current strategy to AUD 2.4 billion at June 30, 2025. It has also supported MFF to deliver more than a decade of stable and growing dividends, which were increased by 12.5% to AUD 0.09 per share in the second half of financial year 2025. This increase has brought our full-year dividends to AUD 0.17 fully franked, and we have sufficient franking credits and profit reserves to ensure dividends will be fully franked for some time to come. Our investment approach is the enabler of how we deliver value. We're unconstrained other than by our own investment processes, controls, and importantly, by where our research best identifies quality and value. Our capital structure allows us to be patient and selective.
Some of our most longstanding shareholders would have heard from us a very consistent message in annual presentations that we are patient, not pressured to act, and when we do, we take a long-term view, favoring duration and allowing the power of compounding to benefit us. As of the end of the reporting period, MFF had AUD 2.7 billion invested across 24 outstanding businesses listed on stock exchanges globally. We also hold approximately AUD 200 million in cash and cash equivalents, with an additional AUD 700 million in available debt capacity. This gives us a high degree of capital optionality.
Looking ahead, adaptation will be essential for continued delivery of strong outcomes, and we are actively exploring where our analytical discipline and long-term mindset can drive further value. It is exactly because of our investment approach, which values adaptation, combined with deep research and strong investment process, that your company is in such a position of financial strength. While MFF has operated successfully with a single employee for many years, evolving our internal capabilities is a natural step in strengthening the business for the long- term, and it assists with succession planning over time. In February, MFF acquired Montaka Global Investments for nominal consideration. Having Montaka under the MFF umbrella provides us with valuable optionality to broaden research capabilities over time.
Today, MFF will also transition core administrative operations in-house across 2026, concluding our longstanding service agreement with Magellan . We sincerely thank Magellan for their contribution over the years. As part of this next phase, the MFF team will be expanding, and I'm pleased to share the appointment of Kirsten Morton and Matthew Githens to our leadership team. Both Kirsten and Matt bring extensive experience in funds management, and their skills will be greatly additive to our business as we position ourselves for long-term growth. As our internal MFF culture of simplicity, no bureaucracy, and alignment with shareholder outcomes will be at the forefront of all of our decisions. Our mantra now MFF is to hasten slowly.
Our strong intention is to be highly selective in the people we bring into our business and in any partnerships we form, and we will stay true to the principles and approach that have underpinned our success over the last decade. With that, I'll pass to Chris.
Thanks very much, Annabelle, and I welcome everyone here and online. Interesting time. It's an exciting time for us. Of course, anytime, and I'll just quickly move to slide six for those online. Anytime a tiny company like ours has three years averaging well over AUD 1 million a day net profit after tax and three years of well above 20% net profit after tax returns after allowing for full tax on both realized and unrealized profits, we shouldn't be talking about it. We should all just go home. We're here. Unsurprisingly, I have my heavily underlined and annotated copy of Galbraith's short history of financial euphoria, just in case anyone gets carried away. There's a lot in here that we can learn from the crises and crashes over the years. Simply put, we should keep our feet on the ground, continue to concentrate.
Just recently, I was working with the Montaka guys on something, and the heading at the top was "No Excuses," and that's what we should have as we go forward. As well as a few numbers, I'll briefly convey three crucial interrelated concepts. The first is margin of safety. Secondly, focus. That'll surprise people. To eliminate the noise. The third is return on luck. That third one is an important and underestimated concept. Duration and its cousins, objective persistence, are obvious when founding and building businesses, but also huge mindset advantages for all investment, whether businesses are listed or not. A little quiz first. Simple maths. What is MFF's pre-tax return required to achieve 10% after tax? Anyone? No? Maybe we've got smarter people online. It's 14.3%. Good. Keep that in mind when you're thinking about the returns versus indices and trusts which incur tax at the unit holder level.
Obviously, it's eccentric to start with our pristine impregnable balance sheet, even after Annabelle mentioned our goals of compounding while seeking to minimize risk of permanent capital loss. Most normal people start with a profit and loss statement. That is a major mistake for analysts, in my view. As impressive as the raw numbers are, dig further into the amazing quality of the assets. A concentration in the best businesses in the world acquired at attractive or bargain prices, held on sensible terms, and almost 100% liquid in one or two days without impacting prices. We've just tested that recently, and it's held. No illiquidity discounts. No independent values or valuations required. No derivatives that have balloon exposures. No evaporating when reached for. Tax, which we'll talk about, is the unhidden cost. MFF has two businesses.
The first is to identify sustainably advantaged businesses with high probabilities of sustained profitable compounding. The second is quality businesses that are out of favour and offer attractive bargain terms. This is the oil well that fills, is emptied, and refills. We talked about that a few years ago. Factors such as timing, scale of opportunities, true probabilities, and risks are impossible to know in advance, but markets give us opportunities, and in MFF's relatively short time since its 2013 formal investment separation from Magellan , we have seen all of the major holdings have realized or unrealized gains pre-tax of in excess of AUD 100 million. We'll go through the holdings soon, but I'll repeat that. Every single one of our major holdings has unrealized or realized gains in excess of AUD 100 million pre-tax. No exceptions.
Some have already recorded many multiples of cost, with future potential, and our Montaka team would describe as combinations of network and flywheel effects going forward from here. Thirdly, I said we had two businesses. We now have a third that we'll think about and work towards. We will aim to partner, link up, develop talent, invest, and assist additional businesses where opportunities complement and/or exceed what we have done to date. We will do this over the next 20 years. Yes, 20 years. We need to focus for the very long term to avoid the massive potholes, some of which are hidden in the black boxes of this bull market. We do not need to reach for any capital allocation and can be extremely patient. Of course, we can have questions on this later.
Before we talk numbers, of far more importance even than what is on the balance sheet is the journey we have started to attract and develop extreme talent and partnerships. We are just starting this journey, and key will be attracting, retaining, and developing the best talent. Today, all of us at MFF are very excited for the future, for the opportunity to build something. Stuart, who I'll embarrass, was there in 2006 when we named and founded Magellan , with its blue colours underpinning the proud mission to circumnavigate the world, guided also by the Australian seven-pointed star. Far earlier, an eager youngster joined the famous House of Warburg as Head of M&A to learn that they had not completed a single public company takeover transaction in the previous 12 months. Lack of due diligence. I needed you, Kirsten.
Shortly after, we scrambled to Launceston, not exactly the hotbed of capitalism, to defend a hostile takeover with a total value of about one quarter of this year's MFF net profit after tax that we'll talk about shortly. That was our first scrape into investment banking. Montaka's research is excellent and will improve. They're of similar age to me when I started with Magellan, but they have had a decade more professional experience, and they have the New York base, which is so crucial. There is absolutely no reason why they can't achieve 10%+ compound returns for the next decade, even from here. If they do so, they are likely to be in rarefied company, and most importantly, their unit holders will benefit. Today, we announced some top talent. Matt Githens is within that top handful of the best risk officers, globally rated.
You may ask why we started with risk. Quickly followed by data science and analysis with David Lee, also formerly of Platinum. You may have heard of Platinum. They did many things at a world-class level at Platinum. Of course, today we also appointed our CFO, Kirsten Morton. I saw firsthand what Kirsten did as a CEO, throwing in the deep end, and longtime Chief Operating Officer and CFO at what was the industry-leading firm for operations and systems, Magellan. Back when I worked for a living, I stood as CEO in front of a thousand people employed and declared that the quote "masters of the universe" were a dime a dozen, and sustained success is built from people, processes, and culture. Hence, risk, processes, systems, finance, crucial.
Whilst we want talent density and growth of talented teams in their careers, we are not replicating what became the number one investment bank, and we are not even competing with Magellan, let alone replicating it. The world has moved on, and we will not simply be repeating build-outs of the past. Although it would be remiss of me not to note that Magellan owes a massive debt of gratitude to Nerida Campbell, whose photo is still outside. Nerida somehow kept things on the straight and narrow for well over a decade from startup as our CFO and COO after leaving UBS as Australasia's CFO to look for a true startup. She ran into my plans when we had her UBS farewell coffee.
Systems and processes matter, and just yesterday I heard a Senior Partner at one of the Big Four audit firms with decades' experience congratulate Magellan on always having the best in industry standards and processes. That's what's important. Let's turn to some numbers. This is from page six. If I can make this work. Up there, it says cash and equivalents, AUD 199.5 million. That's up from AUD 89 million the year before, but we also had AUD 163 million of debt last year. We've gone from a net debt position to just on AUD 200 million of net cash. Today, we're well over AUD 300 million of net cash. Next is investments, AUD 2.74 billion there. Today, the equivalent figure is well over AUD 3 billion down here. It's sizable with well over AUD 300 million of cash available to us. We'll detail the investments shortly.
During the year, in conditions that quite often we felt were very bullish, we sold approximately AUD 530 million cash sales of investments and bought approximately AUD 137 million. Quickly, all of you will be saying, "Hang on, you sold too early. We're now at record prices." That is the record, and we did it, and we itemized, as you see in the annual report, every stock that we've owned at any point. Let's go to this one, our favourite. Those of you who live in Canberra can see that that's a large number. AUD 15.3 million of income tax payable, and that's on top of AUD 91.5 million that was paid by us during the year. Quick maths will tell you that's over AUD 100 million for a year for a tiny company. Down here, we've got net deferred tax liabilities, AUD 390 million last year, AUD 485 million this year. That's an important factor.
We get compounding on the deferral. Therefore, we like to get the Montaka flywheels and businesses that compound over time. Of course, every time we sell, we incur tax. I just said to you that we had AUD 530 million of sales last year. We incurred slightly over AUD 100 million of tax. That's a very high incidental rate. That's a factor, and you'd then be immediately saying, "Hang on, well, that might explain why you're looking for business three of businesses that are going to produce cash and throw new resources to you." Other thing about this balance sheet is that absolutely for the foreseeable future, even though I have a 20-year plan in my mind, Annabelle's probably even longer than that, we don't have to come back to shareholders. We can self-finance anything that we choose to do.
Those of you who are here in the dark days of 2022 will know that we moved to fully borrowed at that time. We're now 11.5% cash, roughly. Anything else on this page? Just in the contributed equity figures down right at the bottom, I'm sure that people can see it fully. It's gone from AUD 707 million to AUD 727 million. That just reflects dividend reinvestment plans. There's been no issuance, no buybacks actually in the last 12 months either. All up, this is one of the best ASX balance sheets that we'll see with the resources available to us. Let's move to the profit and loss statement, the place where people typically start. Clearly, these numbers are enormous. This is page seven. Easily within the top 100 ASX entities for both of the last two years. In fact, the last three years. What do we want to call out?
Dividend distribution income plus interest income, that's AUD 45.7 million less the debt of, where are we, the interest expense of AUD 6.6 million. We've run rates circa AUD 40 million. It might be a little bit lower this year on the interest side of things given that rates have come down a bit. We rolled over a AUD 20 million term deposit this week. One thing we won't do, we won't reach for yield. We've talked previously, in fact, people laughed at me when we put up the charts of something called a state mortgage. That was one of the last disasters where people reached for yield. They bankrupted themselves and their clients and Victoria. We won't be reaching for yield. We'll be sticking to very conservative places to get interest. We don't like cash.
Obviously, with policies of socialists and populists around the world, having cash is not an intelligent thing to do. However, it's necessary to enable you to sleep at night. It's necessary to give you opportunities for the future, although we could run it even closer if we wanted because we have such a highly liquid portfolio. We prefer to have the cash available to us so that we can move on a heartbeat if we wish, if there are opportunities that become available to us. If we get the opportunities, and we'll go to the portfolio shortly, you don't want to die wondering. If you see a compelling opportunity, you want to have it. The last IPO that I pushed us to invest in heavily was Visa. That was 2008. It was a no-brainer. It was demutualizing. There were banks who were selling.
It was one of the best businesses in the world. I'm not sure whether we're up 20 times or something, but it's quite extraordinary. Our track record is to find the very few and very important opportunities that become available to us. The inclusion of Montaka is de minimus. You'll see from the notes of the account that there was a small profit that was realized at that time, realized through the year. I should also mention that with Montaka, we invested in a business alongside the leading asset management assistant company called Scarcity. They invested in a business called Evidentia. That's been largely realized. We received AUD 9.2 million on the AUD 5 million investment. That's the only investment of that character that we've made. That gives us an indication of the types of partnerships, and hopefully, there's more to come.
I see a partner of Scarcity in the room, so hopefully, he's brought some money with him. There's not a lot of that in the P&L. It's very clean. There's no, I'll just push forward. Let's go back one. There's no comprehensive incomes. There's no sort of adjustments that all these companies say that they need to do, just doing normal business. The new website and the logo didn't cost anything, thank goodness, and we're in decent shape. After that, I think we should just have a blank page, but instead, we've got this one. I don't like this page. I don't know whether Rob Fraser's online or not, but I blame him still for this page. Why should we have a blank page? We started zero every year. We started zero based on the mark-to-market at the close of the previous year.
Therefore, your book, A Short History of Financial Euphoria, is important. We should be starting at zero. We should be relaxed. We're not a business that has recurrent income. Having said that, let's turn to this chart. There's a lot of information. What I want you to do, and we're on page eight for people online, anyone who's interested to absorb it, but forget it. To think that this is repeatable or that it's relevant about the way we're going to go forward or anything of that nature, that we should get big for our birds and we should bid this thing up for whatever reason, that's a huge mistake. This is the product of a series of fortuitous events, so return on luck, but also systems and processes that we've had to date. Let's deal with some of the numbers. We started, this is just prior to Brexit.
First thing we have, all of us as investors, we hear all the noise. We've got to cut out the noise. We have to be like John Wooden. John Wooden was the coach of UCLA. He coached two weeks after JFK was assassinated. In Los Angeles, two weeks after JFK was assassinated, a team that had never reached the top four of the NCAA tournaments. There are a thousand college and university basketball teams that you can beat. They went 30-0, even though their average height was roughly my height that year, partly because of the tactics. They then proceeded to win 10 of the 12 championships in an event where you turn over your players every two or three years. That's quite extraordinary. There are systems and processes that were associated with that. That's the type of system that we want to do.
One of the key parts of that system, and we see it time and again, after you've had success, and you see it from the top investors, is that we need to adapt. Annabelle said adaptation is a key to what we're doing. Therefore, the things that have worked in the past may not necessarily work in the future. We go back to 30 June 2017, straight after Brexit, that financial year. We could have all gone and hedged our exposures and those sorts of things. Maybe it would have been a smart short thing to do, but what did Wooden do? Wooden over that period when you had the tail end of JFK, you had LBJ, so I'm hoping Robert Caro's next biography comes out shortly before, you know, he's 95 or something.
You had JFK, you had Nixon, you had inflation, you had Vietnam, you had all of these issues, you had nuclear standoffs, and he still concentrated on the job at hand, which started with teaching these basketballers, including some of whom who became the NBA greats, how to put on their shoes. You didn't get a blister during the fourth quarter of a match. Very interesting, amazing. The attention to detail and the focus. We could have focused on Brexit, we could have hedged, we could have sold everything. Would we have got back in? Don't know. This is the period from there. We started with AUD 786.4 million of net assets. That's the second column right at the top for people online. Over that period, our net profit after tax, so allowing for full tax at 30% on realized as well as unrealized, was just under AUD 1.9 billion.
Clearly something's going on in that situation. Then you go, but hang on a minute, 2022. What the hell happened in 2022? Did you get distracted? Did you have something else to do? Where were you? Oh my God, those who followed Magellan would understand that something happened in that year. Yes, that had a dramatic cost for us. Part of that was clearly lack of focus, difficult markets, but also with regulatory constraints, not being able to protect the portfolio early enough. There are still a couple of other totals. The share buybacks, AUD 43.1 million, we're opportunistic with share buybacks. In that period, whilst we earned AUD 1.9 billion, AUD 495 million roughly of dividends declared. Virtually all franked, there was one that was 85% franked in that period, I believe.
Our contribution to society, just under AUD 400 million in that period of cash taxes paid in that short period. In the meantime, we clearly weren't taking out extreme payments or fees. The total of the expenses was AUD 65.7 million, which compares obviously very favorably. The percentage up here, we increased in the latest year, as Annabelle said, as we increased our talent densification, but the expense indicator even then was 0.5%. I think that's all I want to cover until I get to this one, which is the portfolio. The portfolio as of 31 July 2025, you see net cash at 11.3% is the largest. That's ticking up a little bit. These pages bring together the margin of safety, focus to eliminate the noise, the return on luck, all that we've talked about.
We've had all the investments listed here, with the exception of the Scarcity investment in Evidentia, which went from success to success that I talked about earlier. The other point about the portfolio is that we've had no losses for well over a decade, which is highly unusual. You could argue that we're not taking enough risk. Let's talk about that if people want to do so. As I mentioned earlier, all of the top holdings, which anyone could have bought, obviously, have realized and unrealized gains of well over AUD 100 million. With that, Annabelle, we're ready for questions.
Okay, thank you, Chris. We will move to questions from shareholders, but before we do that, we've had a couple of pre-submitted questions that mostly have been addressed in our presentations, but a couple that have not. The first question is, could you please advise if Montaka currently makes a profit or loss, and what is the two to three-year and longer-term plans? As Chris mentioned, I think Montaka has contributed a modest profit to the group since acquisition, but fair to say that the business is still sub-scale. In the near- term, our focus will be on ensuring that Montaka has the right people and the right systems, both on the investments and operationally, so that the team can invest without distraction and focus on delivering strong results for unit holders.
Longer- term, once we have the foundations right and build it, all built focused and with deep research expertise in Montaka, we will strengthen MFF by adding greater opportunity to how we manage capital over time. Vat, do you want to deal to the Flutter question now, or are you going to do that later?
I'll do that later.
Okay, we'll go to questions from the floor, please. Any questions in the room? [crosstalk] Sharing your names so people online know who you are.
Sure, Murray Hewitt. I just had a quick question in the spirit of adaptation that you spoke about. Can you give us an update on UnitedHealth? I know it's been a holding for a little while. It's increased materially in recent times.
That's a question we've received in advance online as well. UnitedHealth has had problem after problem. On the way to a shareholder briefing, which I've attended in the past and some of the Montaka people have attended in the past, the Chief Executive of their largest health division was executed, literally executed. Unfortunately, the sympathy was with the killer rather than with the company. They proceeded to have a series of errors, and their primary business, I should step a bit back, is health insurance of various forms, including provision to companies. The U.S. is a slightly different, or is a meaningfully different system to Australia.
They also are the leader in providing services to satisfy the health needs of patients, and that's called value at risk, I think, or something of that nature. What that means is that they take on the exposure to treat you for X amount of money, and therefore, they're the largest employer of doctors and related services in the States as well. They also have extremely high-quality data provision, and they provide many of the ancillary services, whether they be billing and accounting and similar for medical providers all around the United States. They're a very large company. Their revenue, roughly $520 billion, so they're not small at all. They went from that very, very tragic event to mispricing insurance across the board, whether it was Medicare, Medicaid, or corporate. Part of that was adverse selection with the changes of the political environment.
Young, healthy people dropped out of various cohorts. Other people who had greater health requirements moved into the cohorts. Of course, that meant that the medical loss ratio, so in other words, their profit, which is only 2% or 3% sometimes, but on average, it was 5% or more, dropped by a few percentage points. Similarly, with the increase in costs, their cost of servicing the doctors and actually providing the medical costs, they went up as well. A few years ago, they appointed an Englishman with an interesting track record, quite good capability, and experienced Chief Executive as Chief Executive. It was the change to culture, the culture of previously being very hands-on, very detailed focus, very collegiate and community-focused.
The combination of those factors meant that they gave what's called a profit warning, and they had a series of profit warnings where they said that they weren't going to earn as much as previously forecast. They brought back the man who developed the business into UnitedHealth of today, who'd previously been non-executive chairman, who is all over things as an obsessive, and they've now restructured the team. The test is whether they can move from moderate to low profitability on the individual AUD 500 billion, and their forecast, I think, if I've got the numbers right in my head, circa AUD 20 billion of profitability. They're not unprofitable, but it's of that order of profitability that they're forecasting for this year, and maybe it'll be the same, maybe it'll increase a little bit next year.
What they'll do is that health insurance, unlike most products, if you get a bad bank, the loans are stuck with you. You suffer the capital loss on a modified basis. Insurance reprices six months, 12 months, 18 months, 24 months, and the price increases that the whole industry are taking are very significant. You see that we also own CVS Health, which has the third largest insurer called Aetna, and we also own the number one hospital group in the world, HCA Healthcare. We see that. We're only expecting if they simply reprice, if they simply fix some of the adverse selection, if they refocus on their business, they'll become a multiple of this. It's got parallels too, but it's not the same as Facebook that we bought heavily in 2022, for example, when it was sold by everyone and hated by everyone.
Facebook had, or Meta as it's called now, had much more upside. They, however, have, this is UnitedHealth, they have extreme capacity to increase the digitalisation, and they were going to do that anyway. On top of just a return to mean, they're actually one of the AI and digitalisation potential beneficiaries. The whole portfolio fits into that category. If they achieve that, you potentially get a double benefit. That's down the track. It maybe will take quite a while. One of the things that we love is that all the index holders who are price agnostic have been forced to sell. All the people with short-term focus saying, "Oh my God, they forecast AUD 16 a share only for this year." They shouldn't be on a 15 times multiple, so therefore we're going to sell at AUD 250 or below. Interesting opportunity.
It fits within both our category one and our category two, and our management of it would then go to portfolio sizing as to how clearly it would fit in. Sorry, a slightly long answer, but...
Good.
Thank you, Chris and Annabelle, for the opportunity to attend today, and congratulations on the consistent returns for shareholders. Can I pick up on your comment about Montaka being sub-scale? Can I ask about what steps are being taken to bring that to scale and where you see that headed in the longer- term, please?
I'm happy to answer that one. I did also say we're going to hasten slowly. I think step one in that is to make sure that we've got the best quality people that we can have in the Montaka team. That's currently underway in terms of recruiting more people on the research and investment side. It's just making sure that we really, you know, not really liking the gold plate because it sounds like you're overdoing it, but making sure that they've got really solid systems and processes, and then performance will speak for itself. Do you want to add?
I'm slightly an outlier on this one. I don't care if they're profitable in the near term. I do care. I still pick up AUD 0.05 off the ground, AUD 0.10 off the ground, and I annoy Begonia with it by putting it up on the Magellan mantle, please, just in case the fees dry up here. It's just not the point. They will get there with performance over a period of time. If they get double-digit compound from here, they will be in, as I said, in rarefied air. Therefore, I want them to absolutely concentrate. The highs that they've just made at the heart of a young bloke who, of course, got full marks in the HSC, he's Vietnamese, parents of Vietnamese, penniless immigrants coming here who have been to a couple of other places and he decided that Montaka is the place for him to be.
It's just so perfect for him to fit in. They have demonstrated on some of the places that they've gone, whether it's the private equity, whether it's Spotify that we've talked about previously, their understanding of tech. If you haven't done so, people online and here look at the website, look at the material. They put too much material up in my view of what they can do. It shows real research excellence and insights. If they continue to do that, it'll work out. I am going to just quickly tell a story. The Magellan Global Fund was launched July 1, 2007. The big man rang one of the assistants and said, "Sick, Chris has got to present." I knew nothing about it. I hadn't even looked at or thought about the slide. At that time, there were four stocks that he'd picked to put forward. Nutris ystem.
Has anyone heard of Nutris ystem? It's a crappy weight loss company that failed badly. Abercrombie and Fitch, you know, give me a break. How could that possibly be a quality stock within our definition? Ferrovial, which is an engineering company, which happened to own the 407 Toll Road in Canada. 407 Toll Road's fantastic. It just prints money, same as Transurban in Australia. I think the final one was Nestlé. Notwithstanding that the presenter was dreadful and that the presentation was dreadful, and we didn't get a cracker for a very long period of time, and those stocks were shocking. Eventually, they went down and out of the portfolio because we did receive some money in. Magellan Global Fund became by far the largest ever Australian globally focused investment fund. Montaka starts, if you're talking about a 400 m race, Montaka starts on the 100-meter-to-go line compared to that.
Any other questions here? No, we might go to the operator. Betsy, if you could take any questions online, please.
Of course. If you wish to ask a question over the phone, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are using a speakerphone, please pick up the handset to ask your question. The first question today comes from Wayne Jones with Ganes Capital. Please go ahead. As a reminder, if you would like to ask a question over the phone, please press star, then one to enter the question queue.
I still haven't addressed the two other questions.
Yeah, Flutter and Prosus.
In addition to, there were various other questions that came in, but there were a couple of portfolio questions. UnitedHealth, which someone answered at length already, the answer in relation to, we exited Flutter in July. Flutter Entertainment, it's the world's leading gambling and gaming company, exceptional company within this business. Obviously, it has benefits of digital and AI and things like that. They manage risk on a global basis. Sportsbet in Australia, FanDuel in America, which has a 40% market share roughly, and a number in the UK, Brazil, Italy, elsewhere. It was a very successful business to us. The rationale for exiting, not simply because we've now got to grow up and decide in a social sense, sometimes what exposures we want because there are people who legitimately have issues.
We've just seen in Australia, anyone who's thought about the idiocy of government to tax tobacco so much that the illegal trade is now multiples of the legal trade. Do you think that Illinois, New York will be the last states in the United States to say, "Oh, there's gambling going on here, we won't increase our taxes"? Probably not. That's not factored into the consensus, which had moved to 50%, 50x plus earnings. High-quality company, social risk and regulatory taxing risk. I think that they'll do well. Virtually, what you want when you sell a company, you don't want it to go down because that says that you were lucky in your assessment. It may well continue to go up. There's a famous investor by the name of Michael Steinhardt. Occasionally, when he got a bad back, he would sell the whole portfolio just to clean it out.
That stood him in good stead for a very long period of time. We're not as superstitious as that, but we were able to sell that position in under two days. The comment I made earlier about, and added higher prices than it was at 30 June. The comment I made earlier about liquidity, we demonstrated that in relation to, I think it was a 3% or 4% position. The next question is, MFF has little exposure to Chinese technology companies. Is China Tech being considered uninvestable for the MFF portfolio, or have the opportunities just not presented themselves? The opportunities sure as heck have presented themselves. We talked earlier about the dreadful 2022. One of the Senior Portfolio Managers who I had the displeasure of having to work through, he was a favorite of the team prior to the meltdown, and we were running through.
The ultimate coup de grace was trying to develop a small medium company portfolio. We did eight meetings, just pain in the butt. Eventually, he showed what his watchlist was, and more than half of it was China companies. I don't know whether you've seen China education companies get smashed, China tech companies get smashed, China this and China that. His view was, when I said that that may be carrying quite a bit of risk, well, that was my opinion. It was and is my opinion that it's very hard for us from here to work it out. I disagreed, but hoped to support Hamish when he went heavily into Alibaba and Tencent.
I remember on the day that Xi Jinping intervened to outlaw Jack Ma, he just happened to ring me in the morning and say, "It's gone really well and we're about to do a big IPO." I said, "You know, thank goodness. I'm hoping it goes, I hope it goes well for you, but it really, really worried." There's been nothing that's happened in the three or four years since. There's a couple of indicators for people who are still skeptical on that, that you don't have to make money on every opportunity. If you go to China and even now today, you talk to the executives in the large banks, they do exactly what the government tells them. If the government tells them to lend, they will lend. If they've been asked to write off bad debts, they'll take bad debts.
The better example, in fact, is PetroChina, which never got anywhere back to where it was, despite being, you'd think oil extraction would be pretty clear and pretty easy and free from government interference in there where they need the oil and they don't want to be getting imports. Time and time again, there's been government-related transactions. We're cautious. We own Prosus. If you go back to the June, I think it was the June NTA, there was a long discussion of the opportunities. One of the things that's interesting with tech is applications or adaptations on top of the various cloud and other things that are happening at the moment. Prosus is at the forefront of that. They're the leading delivery company in South and Latin America, for example. They're about to take over one of the main European food and other delivery companies as well.
They have a whole series of technology-related. The kicker, of course, is that they own 26% of Tencent. Tencent is the best company bar none in China. If it was located elsewhere in the world, it would easily be one of the Magnificent Seven they reported yesterday. We have an indirect holding into that. Why do we have that holding? The look-through value was half of the price we would have had to have paid for Tencent. That's all.
Good. We have one question from people online.
Next question over the phone comes from [Michael Walmsley from WFT]. Please go ahead.
Yeah, hi Chris and everyone. Thank you. Just two questions, Chris, and I'm sure it's on the website. Maximum holding per stock, I think that might be documented somewhere. The only other one was return on luck. Could you just, I see focus, that's probably tied up with my first question. Return on luck, could you just explain that a little bit? Thank you.
Yeah, pleasure. Thank you. Wow, I've got an opportunity. How long have you all got? Okay, maximum holdings within the portfolio. The general limit is 10% at cost, and the directors have approved from time to time holdings at 12% at cost. At the moment, we're choosing to be 10% or below by and large, and we've reduced a holding down to that level, notwithstanding a confidence about its outlook. Better examples, of course, are Visa and Mastercard that we've trimmed from time to time. They've just kept on going up, their related stocks. We've put them both at 10% and below. We've, of course, had, if we buy a business or buy an interest in a business, it may be that we buy even up to 100% of it, as we've done with Montaka , but that, of course, costs very little.
We haven't set for the board firm parameters around it, but it's unlikely, particularly if we're taking a 20-year view, that we would be spending a lot of money on a particular individual thing. It's pretty easy to get toasted with these things. Let's say in terms of the aggregate portfolio, if we've got AUD 3 billion of investable assets, I hesitate to see a business that we'd want to put even half of the AUD 300 million 10% limit into as we're developing. Frankly, if you think we're in Magellan 's offices when they bought into Baron Jay, we, of course, bought both Morgan Stanley and JP Morgan, made a lot of money and clear money over a reasonable period of time. The global comparisons are often better, and they're clearly within our limits at 10% or less.
Return on luck, an example that I just saw recently was how lucky was Munger. Munger came back, his father had died in Omaha. He'd gone to Los Angeles, hardly blame him, and lived there for a long period of time. Father died, he came back to settle the estate. A long-time family friend said, "You need to meet this weird guy who's seven or eight years younger than you." He became Charlie's sidekick, and he was already 36. That's a return on luck. With a prepared mind being available to choose to decide to be the associate of Buffett and to realize relatively early along that Buffett was a champion investor, Munger, who ran his own partnerships at the time, was less good, but still very good if he became a partner. Return on luck when you get situations.
We've clearly had boats lifting, the tide lifting all boats over the last little while, and we've been able to at least get some sort of return from that. That again is return on luck. It's important to disassociate yourself from the fact that things went up.
I think there's one more question from people online. Yep.
The next question comes from [Robert Albany], who's a private investor. Please go ahead.
Hi Chris, thanks everyone for today and their presentation. My quick question was just about future dividend payments and the very enviable position that MFF is now in with such a large profit reserve and a large franking balance. I think comparing against other listed investment companies across the ASX, they'd be very enviable of the position that MFF is currently in. Just as a shareholder, I just wanted to see what the team's thoughts are about dividend payments for the future, and I guess more broadly about how you're going to utilize the excellent sort of rock solid balance sheet that you're in now with regard to dividend payments down the track. Thanks.
Thank you for the question. Those who've been here for a while know that we began and I began recommending the payment of dividends through gritted teeth. I would much prefer that we'd retained all the capital and compounded all the capital, and so we would have had an extra AUD 500 million or whatever, then compounded that, say, 3x or something compared to if we paid the dividend. Of course, that's an unpopular view, and even I don't fully ascribe to the view. We are now in a position where one of our goals is to pay consistent and increasing dividends over a period of time. We'd foreshadowed AUD 0.08 per share, fully franked, for this dividend. We paid AUD 0.09, as Annabelle said to me, when you called me and said, "We've had a good year. We should reward the shareholders," and that's the logic.
We paid a special dividend in 2020, immediately prior to COVID. I'm still traumatized by that, so 2020 and 2022. If we'd kept the money available, it would have been much wiser. We, of course, didn't know that COVID was about to happen, and we were paying it. We also had the reverse reaction to what we expected. I expected that people would regard past consideration as no consideration. As soon as the dividend's paid, you know, it's all gone and we'll forget about it. Instead, people pushed up the stock and got really excited because of the special dividend. It was exactly the opposite of what we wanted to have happen. My expectation is that we'll continue to be paying fully franked and modestly or moderately increasing dividends over time. The alternative, of course, is to find things.
UnitedHealth, in my view, will take a few years to play through. We haven't found a new stock to add to the portfolio for a couple of years. If we do, and it's potentially at 5x or 10x, 20x, I'd much rather we do that than pay out an extra cent or two on a dividend. It's going to help us with it. Now that we have the third line of business, i.e., building businesses, that's very valuable that we can do over a period of time. We won't forget the dividends, so they'll gradually increase over time. The advice from the professionals, and maybe it's the famous last words, is that the powers that be, for want of a better expression, who are about to have their tax talk in Canberra next week, that they're not about to go and attack franking credits. We'll see.
Clearly, if they go and attack franking credits, that's immediately damaging to all of the 15,000 shareholders in like MFF, which has paid tax in good faith based on a system. Annabelle, do you want to add?
No, I think that sums it up completely. I don't believe there are any further questions online. Are there any last questions from people in the room? If not, I think it's my role to say thank you very much for joining us today, and we look forward to seeing you at the AGM. Thank you. I'll close the meeting.