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Augusta lifts net profit six fold as investors flock into new funds

Friday 24th May 2019

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Augusta Capital’s annual net profit rose more than six fold to a record as underlying income, management fees and transactional fees all grew strongly.

The property company’s net profit for the year ended March rose to $6.9 million from $1.04 million the previous year. The year-earlier result was dragged down by a $2.2 million loss on available-for-sale financial assets and fair value losses on investments and associates.  

The company launched four new funds during the year and raised $255 million and net funds management income rose more than 40 percent to $17.3 million.

The funds included the $171 million industrial fund in which Augusta has taken a 10 percent stake.

Managing director Mark Francis said all four funds launched in the last financial year had been over-subscribed.

“We’ve seen more new investment than we’ve ever seen, to be honest. We normally would expect that about 60 would be existing (investors) and 40 new and it’s almost the other way around of late, which is really healthy for us," Francis told analysts on a conference call.

“We’re seeing more cold calling of investors looking for a place to park money and asking about new offers coming up. We’re seeing more of that activity than we ever have, and in decent sized tranches too, as people are getting driven out of the banks,” he said.

Net management fees rose 24 percent to $5.2 million in the latest year and net transactional income jumped 94 percent to $4.1 million with net deal fee income up 55 percent to $8 million.

The company sold the final part of the Finance Centre for $41 million in March and used the funds to buy two tourism assets destined for a tourism fund to be launched later this calendar year.

Net rental income fell 47 percent to $3 million due to the divestment of two of four Finance Centre properties but offset by income from warehoused assets.

“The company has again demonstrated the ability to deliver on the strategic plan by continuing to launch and grow new fund initiatives, delivering an increase in recurring earnings and building strong pipelines for the launch of future funds,” Francis said in a statement.

Augusta will pay a 1.625 cents per share final dividend, up from 1.5 cents in the previous three quarters and taking the annual payout to 6.125 cents from 5.625 cents the previous year.

Augusta shares are 3 cents higher at $1.18, above their 98 cents net asset backing at March 31, which is up from 96 cents a year earlier.


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