Souls Private Equity Ltd believes its current portfolio of 15 small to medium sized enterprises (SME) is well placed for continuing growth, after the group posted a rise in annual earnings.

Souls, which listed on the Australian Stock Exchange in December 2004, booked a net profit for 2005/006 of $10.4 million, compared to a net profit for the seven month period to July 31, 2005, of $2.23 million.

While the Australian economy has been mixed over the past 12 months we believe that our current SME investment portfolio is well placed to continue its growth, said Souls chairman Robert Millner.

Our investment niche, SMEs, is an attractive sector of the market as investment opportunities continue to be available and we believe we are able to add value to these companies.

The group currently has $81.9 million invested in SMEs, representing 50 per cent of its net assets at July 31.

This financial year the company made new investments worth $40.5 million in four companies - electrical equipment supplier Ampcontrol, Food and Beverage Company (which owns Krispee Kreme's Australian operation and Jesters Pies), Chinese building materials procurement company Source Engine Asia and mining engineering company Imdex.

Souls declared a final dividend of half a cent.

Its shares closed up two cents at 21 cents.