Overview of Strata Investment Holdings preliminary financial report for the year end 31 December 2023

Strata Investment Holdings (ASX: $SRT) has released its 2023 Appendix 4E Preliminary Report, providing an overview of the company's performance for the year ending 31 December 2023. The report highlights the company's significant investment exposure in copper, along with increased investment exposure in lithium, rare earths, and oil and gas. Strata Investment Holdings plc's administration costs for the year were £2,874,000, with legal fees and share-based payment charges stripped out from the respective years totaling £2,019,000. The company's overall loss for the year resulting from the disposals and fair valuing of investments during the year was £3,958,000, with the main contributors to the loss being the active portfolio. The company received lower dividend income of £44,000, primarily as a result of Sandfire ceasing to declare a first or second dividend and rather investing the capital in developing its assets and acquisitions. The company had net finance cost of £420,000, with the change year on year mainly as a result of the change in the value of the derivatives that hedge and secured the Group's structured finance loans.

Executive commentary on market performance and company's investment strategy

In 2023, markets generally rallied, except for China, where its economic recovery has faltered. Despite official economic data indicating a 5.2% GDP growth in China, the country faced economic challenges including a sharp drop in real estate construction, strained local government finance, and falling exports. This was counterbalanced by surging manufacturing and infrastructure spending which outweighed the drag from property. The year ended with the Fed deciding to hold its policy rate in the 5.25%-5.5% range likely signaling the end of the rate hiking cycle with three quarter-point cuts having been signaled for 2024. Commodity prices moderated in 2023, driven by softer global demand and adequate supplies. Strata Investment Holdings plc maintained its significant investment exposure in copper, while also notably increasing investment exposure in lithium, rare earths, and oil and gas. The company's investments are medium to longer term in nature, offering exposure to earlier stage exploration projects where the company has a significant interest and therefore some ability to influence strategic outcomes.

Summary of Strata Investment Holdings preliminary financial report and outlook

Strata Investment Holdings plc's 2023 Appendix 4E Preliminary Report highlights the company's performance for the year ending 31 December 2023. The report indicates the company's significant investment exposure in copper, along with increased investment exposure in lithium, rare earths, and oil and gas. The company's overall loss for the year resulting from the disposals and fair valuing of investments during the year was £3,958,000, with the main contributors to the loss being the active portfolio. The company received lower dividend income of £44,000, primarily as a result of Sandfire ceasing to declare a first or second dividend and rather investing the capital in developing its assets and acquisitions. The company had net finance cost of £420,000, with the change year on year mainly as a result of the change in the value of the derivatives that hedge and secured the Group's structured finance loans. Looking ahead, Strata Investment Holdings plc continues to focus on undervalued investment situations with the potential for substantial exploration upside, while maintaining a strong level of diversification in the Passive Investment portfolio in terms of commodity, jurisdiction, and project development stage. The company has identified a Complementary Investment under its new investment policy and is in the process of progressing a potential investment as part of this strategy. Additionally, the company has managed to increase its warrant portfolio through investments in the year.