The Australian Growth Fund fell -0.1% in August, lagging the benchmark index which rose +3.6%.  

The Australian share market rose in August as many companies delivered full or half year financial results. The positive return for the ASX200 and the flat (in absolute terms) return for the Australian Growth fund belied a particularly volatile month for individual share prices. The market reacted sharply to positive and negative news related to these individual results. 

 SEEK (+15%) was our standout performer. It reported a solid set of results in-line with guidance and the market's expectations. It delivered on its three strategic goalsof growing placement share, driving double-digit yield and achieving operating leverage. Even as job ad volumes softened, underscoring the resilience of its marketplace model. The financial year of 2025 marked the first full year of SEEK operating on its Unified Platform across all its geographies. This supported the increased cadence of new products and updates, while also enhancing the experience for both hirers and candidates.. 

 While CSL's (-21%) FY25 result was largely in-line with expectations; however, it was the qualitative commentary accompanying the result that primarily drove the share price fall during the month. The reaction of the market can likely be attributed to three key factors, all of which we believe were more of a communication faux pas than a structural shift in the thesis. First CSL removed the timeframe it was targeting to get Behring gross margins back to pre-COVID levels. The announcement surprised the market, particularly as previous headwinds were now becoming tailwinds (Fx, product mix, RIKA efficiency improvements). Management later explained that it was still confident it could hit the targets, but timing was uncertain. Management also announced a strategic transformation that would deliver annual pre-tax savings of US$500m+. On the call management seemed to confirm that these savings were required to achieve the previously announced target of double-digit earnings growth pa through to FY28. Since the result call management has confirmed that the savings are not required to achieve the targeted double-digit earnings growth pa. Instead, the restructure was to reduce corporate bloat, and savings would be reinvested into R&D which will help accelerate revenue and profit growth further. The third was the impact of regulatory pricing changes in the US and the loss of a one-off large tender on FY26 plasma growth. Importantly CSL reiterated that the FY26 underlying growth is expected to be in the double-digit range and CSL is confident it can grow mid-to-high single digit pa in the medium term. Importantly for us, while we think management could have done a better job communicating some of these issues, the investment thesis remains intact. We believe the share price reaction was overdone and we bought shares.