Augusta Capital Ltd more than doubled profit in the March year as it continues developing as a funds manager.
The financial result is the strongest in the Company’s history delivering record operating earnings. Managing director Mark Francis said: “The period under review saw the company continue to gain momentum with the launch of new funds as well as build strong pipelines for further growth.”
- Profit & total comprehensive income after tax, up 116% to $6.95 million ($3.2 million)
- Net revenue $22 million ($18.9 million)
- Pretax profit $9 million ($2.96 million)
- Recurring management fee income, up 47% to $9.32 million
- Transactional income, up 94% to $4.13 million
- Adjusted funds from operations, up 34% to $7.74 million ($5.79 million)
- $255 million in equity raised, a 102% increase
- Augusta Industrial Fund launched, raising $171 million of new equity across 2 capital raises
- 2 new single-asset funds launched, raising $84 million of equity
- All 4 offers oversubscribed
- Finance Centre sold
- Net assets/share increased to 98c (96c), primarily driven by retained earnings
- Basic & diluted earnings/share 7.93c (3.67c)
- $19 million investment in Augusta Industrial Fund – 10% long-term stake
- Secured seed assets for the Augusta Tourism Fund and a future pipeline of opportunities
- Group gearing was 11% of gross asset value at balance date (31.2%)
- 4th quarter fully imputed dividend 1.625c/share (1.5c in each of the previous 3 quarters), supported by the increase in recurring earnings.
Return shows transition to funds management model is paying off
Augusta Capital chair Paul Duffy said the record result was delivered in the final period of major transition to a specialist & diversified funds management model, and the stronger return on investment showed the move was paying off.
“The result was delivered with a very different revenue profile to previous years as we redeployed capital to support our strategic plan. Profit more than doubled, driven by strong income growth in a period with a large number of transactions and a significant increase in recurring fund management fees.”
The $1.8 billion managed portfolio comprises 58 funds – 2 multi-asset property funds & 56 managed schemes in New Zealand & Australia.
Net funds management income increased by over 40% to $17.30 million ($11.48 million).
Rental income reduced from $5.65 million to $2.98 million, in line with the phased exit from the Finance Centre.
Management is investigating & completing due diligence on a wide range of opportunities for both single & multi-asset funds.
Mr Francis said significant work continued to be completed on the initial seed assets for the Tourism Fund: “The development at Cook St, Auckland, of a Jucy Snooze Hotel continues to progress, with a preferred contractor appointed and the building consent process nearing to a close.
“At Man Street, Queenstown, a procurement process for the hotel operator has been completed and negotiations are now being moved forward with the preferred operator. A contractor is also likely to be engaged on an early contractor involvement basis in the near term.
“It is currently expected that the Tourism Fund will be launched in the third quarter, subject to the above key milestones being successfully completed.
“In addition, a number of other potential assets continue to be investigated and the Lakeview development is expected to provide stock for the Tourism Fund in the medium to long term.”
Near-term strategic operating priorities include:
- Tourism fund launch – progress developments prior to fund launch and look for additional tourism-based opportunities
- Progress Lakeview negotiations as the company moves towards development
- Launch of Value Add Fund No 2 – a potential residential land development
- Asset Plus – seek further acquisitions in line with strategy
- Continuous improvement in how Augusta operates & engages with investors
- Active management – a number of opportunities within the managed portfolio
- Building further strategic partners as the company broadens its product offerings
- Continue to seek further acquisition opportunities for existing funds &/or the establishment of new schemes.
Changes in senior management
Bryce Barnett’s title has been changed to executive director as his funds management responsibilities have shifted to chief operating officer Joel Lindsey. Mr Barnett continues to remain focused on opportunities in Australia, investor relations (including roadshows to retail investors) & certain key tenant relationships.
In addition, head of operations Adelle McBeth has joined the senior management team.
Attribution: Company release.