OneVue Holdings Limited (ASX: OVH), an Australian financial institution providing superannuation and investment solutions announced the sale of its Trustee Services business to Sargon Capital Pty Limited (Sargon) which is a financial technology and infrastructure company which focuses on its key administration business of Platform Services and Fund Services. The divestment of this unit was under process for the past 12 months which has now come to an end.
The sale of this unit was for $45 million cash. Here, Sargon was supposed to pay $37.0 million on completion of the transaction. Another $8 million need to be paid in 12 months. For OVH, its Trustee Services business has contributed $6.7 million of revenue in its consolidated financial report of FY2018. The company believes that the transaction will complete in the early period of 2019 which will depend on the level of satisfaction of condition earlier discussed in the deal. Through this transaction, OVH has plans to reduce its debt followed by the gradual addition of new acquisitions in its core business and also pay a fully franked dividend.
Through this transaction, OVH will be able to establish a strong existing relationship with Sargon. Further, Sargon’s owned financial company “The Madison Financial Group” uses OneVue’s platform which is a positive signal for both the companies to further explore on-going business opportunities.
The official listing date of OVH on ASX is 25 July 2014. Since then, the performance of the company is 79.37%. However, the past one-year performance of the company is -17.52%.
For the FY2018 ending on 30 June 2018, the company has made a profit of $7.139 million.
The balance sheet of OVH for the period might create a positive influence on the investors and the shareholders of the company as the company has maintained a net asset base of $92.565 million and a decrease in accumulated losses as compared to the previous financial year. However, the company might face challenges in meeting its working capital requirement and also the short-term obligations as the total current asset is $28.970 million which is very close to its total current liabilities of $27.701 million. The total shareholder’s equity is worth $92.565 million. There was a net fall in cash and cash equivalent by $7.241 million. As a result, FY2018 reports net cash and cash equivalent worth $19.404 million.
The sale of the business and the company’s outlook for the upcoming fiscal year has a positive impact on the share price of the company.
With the market open on 20 December 2018, the opening price of the share was A$0.595. It went as high as A$0.625. The lowest share price recorded for the day was A$0.590 with a daily volume of 980,241 shares which traded on ASX today. The closing price of the share was A$0.600 which was 0.035 points above its previous day’s closing price with the stock holding a market capitalization of A$149.35 million and PE ratio 20.93x.
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