Changing focus for Augusta

Augusta Capital’s shift away from an investment model of direct ownership has made for a 42% drop in total profit this year, the company’s end of year results show.

Tuesday, May 30th 2017, 4:00PM

by Miriam Bell

Mark Francis, Augusta Capital managing director

The company, which specialises in property investment and funds management, reported that its total comprehensive income for the year ended 31 March was down $5.7 million, or 42%, to $7.8 million.

This was a drop from last year’s profit of $13.5 million – but it was anticipated.

Augusta Capital managing director Mark Francis said it was due to lower re-valuation gains and disposal gains as directly-held investment portfolio assets continue to be divested.

The company is going through a period of change as it strives to become a leading property funds management specialist.

Francis said the company was actively transforming its balance sheet to fund the growth of new funds management initiatives.

“By moving away from a traditional, directly owned investment model to a less capital intensive growth model we are delivering a more diverse and recurring earnings profile.

“This will better protect and help grow future value for our shareholders.”

To this end, Augusta Capital was pleased with its results which it said show strong earnings growth emerging from funds management.

The company’s net revenue was up $1.9 million, or 11%, to $19 million, while its net profit was up $1.7 million, or 24%, to $8.7 million.

It also saw 19% growth against the year before in adjusted funds from operations to $6.75 million. This equated to operating earnings per share of 7.7 cents, as compared to 6.5 cents last year.

It now has total assets of $1.6 billion under management, which is 9.5% growth on last year, and has seen 10% growth (to $5.60 million) in recurring annualised base management fees as compared to last year.

Francis said that recurring fees from funds management are now a substantial growth component in overall earnings and were the key takeaway from the results.

The increased revenue profile and operating earnings was supported by a number of strategic funds management initiatives, he said.

These included the completion of five new deals, with $203 million of new equity raised from both new and existing investors, alongside its first Value Add Fund and its holdings in property investment company NPT Limited.

“This is a new source of income that will continue to be an important feature of future earnings as we grow our total funds under management,” Francis said.

Moving forward, the company expects to maintain its improved earnings with a focus on the management of existing assets to generate increasing returns and value for investors.

Initiatives, like the company’s 33 Broadway offer (due to settle on 30 June 2017), alongside the settlement of Augusta House and the launch of new investment products, will be a continuing focus.

Francis added that there was now a new board in place at NPT and Augusta will be putting forward a new proposal for that board over the next weeks.

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