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Augusta Capital annual profit drops 42% as it changes focus to syndication, management

Tuesday 30th May 2017

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Augusta Capital posted a 42 percent drop in annual profit after a reduction in its directly held property portfolio led to it having a smaller increase in the value of its investment properties.



The listed property investor and fund manager reported profit fell to $7.8 million, or 8.86 cents per share, in the year ended March 31, from $13.5 million, or 15.46 cents, a year earlier. It booked a $4.1 million gain on the value of its investment property, compared with a $7.1 million gain the previous year. Revenue rose 6.3 percent to $23.3 million as a lift in funds management revenue offset a decline in rental income.



Augusta has been rejigging its business, moving away from owning property directly and diversifying into property syndication and funds management. The value of its assets under management increased to $1.6 billion from $1.46 billion over the past year, with its gross management fee lifting by 36 percent to $7.3 million.



"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, which will better protect and help grow future value for our shareholders," managing director Mark Francis said in a statement.



In July last year, Augusta shareholders approved the sale of its Finance Centre for $96 million to be staged through to April 2019. The company said today that money from that sale would be used to grow its funds management business in the future. 



The company said it expects dividends of 5.5 cents per share for the 2018 financial year, up from 5.375 cents in the 2017 year.



Augusta, which owns 18.9 percent of listed property investor NPT, reiterated that it intends to present a proposal to NPT's board to externalise the management of NPT's properties to Augusta following a meeting last month where shareholders supported Augusta's wish for changes to the board. Augusta wrote down the value of its holding in NPT by $2.2 million in its latest earnings, saying it had paid above the trade price for the stock.



Shares in Augusta last traded at $1.01, and have dropped 4.8 percent the past 12 months. NPT last changed hands at 61 cents, having shed 6.6 percent the past year.




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