K2 Asset Management Releases its Half year Results

K2 Asset Management Holdings Limited (ASX: KAM) is into fund management business. The company operates in managing funds for retail, wholesale and institutional investors. The objective of the company includes achieving positive returns for its clients and the preservation of their capital.

On 13 February 2019, the company has released its half-year results for the six months ended 31 December 2018. On the financial front, the company has reported a revenue from ordinary activities of $2.66 million for the half-year period ended 31 December 2018 as compared to $10.83 million for the previous corresponding period. The total comprehensive income for the half-year ended 31 December 2017 was reported at ~$5.21 million; however, a loss of ~$0.55 million has been reported during the same corresponding period in 2018. 

On the balance sheet front, the company reported total current assets amounting to $14.28 million for the half-year ended 31 December 2018, however, total current assets were reported at $16.61 million approximately in the previous half of June 2018. The company reported total assets of ~$15.40 million for the half-year ended 31 December 2018 as compared to ~$17.53 million in the previous half of June 2018. The cash and cash equivalents of the company were reported at ~$13.46 million for the half-year 31 December 2018.

On the cash flow front, the company reported net cash used in operating activities of $2.25 million for the period half-year ended 31 December 2018 as compared to an outflow of $2.09 approximately for the previous corresponding period. The cash flow from investing, however, represented an outflow of ~$0.010 million for the period half-year 31 December 2018.

The Management fees for the half- year period totalled $2.4 million, with additional other revenue totalling $0.2 million. The company is anticipating FY19 to deliver a number of opportunities originating from strategic and organisational improvements made in FY17 and FY18.

As per the notes for the related parties, K2 Asset Management Ltd provides investment management services to related party unit trusts, the K2 Australian Absolute Return Fund, K2 Select International Absolute Return Fund, K2 Asian Absolute Return Fund, K2 Global High Alpha Fund, K2 Global Equities Fund and K2 Australian Small Cap Fund (Funds). K2 Asset Management Ltd is entitled to receive payments from the Funds where it provides investment management services, including management fees, administration or responsible entity fees and in some instances a performance fee based upon the relevant fund’s investment return over and above a specified benchmark.

On the price-performance front, the stock of K2 Asset Management Holdings Limited is currently trading at $0.070 with a significant decrease of 10.256% approximately during the day’s trade with a market capitalisation of $18.8 million. The stock has yielded a negative YTD return of 8.24% and posted negative returns of 44.29%, 22.0% and 13.33% over the last six months three-months and one-month period respectively. It has a 52-week high price of $0.280 and a 52-week low price of $0.070, with an average trading volume of 68,504. The stock is trading at a PE multiple of 3.590x with its EPS at AUD 0.022 and with an annual dividend yield is 6.41%.


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