Lens on three financial companies - VGI, NGI, PNI

  • Apr 18, 2020 AEST
  • Team Kalkine
Lens on three financial companies - VGI, NGI, PNI

The financial sector of Australia plays a significant role in the growth of the overall economy. The financial system of Australia is robust, with an ability to withstand shocks, and continues to strengthen. The sector includes those companies who are in the business such as banks, managed funds, and general insurance, among others. The health of this sector is highly sensitive to the steps undertaken by regulated authorities, including the Reserve Bank of Australia, Royal Commission, and APRA (Australian Prudent Regulatory Authority).

In this article, we will look at three ASX-listed financial players and their recent updates.

VGI Partners Limited (ASX:VGI)

VGI Partners Limited is a global equity manager, which manages capital for high net worth individuals, family offices and two listed companies: VG1 and VG8.

Significant Growth in FUM during FY19

As on 31 March 2020, the funds under management of the company stood at $3.2 billion as compared to $3.1 billion as on 31 December 2019.

  • For the full year ended 31 December 2019, the company reported a rise of 48% in fund under management to $3.1 billion. This growth comprises $300 million due to raising for VGI Partners Global Investments in June. Around $550 million was due to the IPO of VGI Partners Asian Investments in November, and more than $100 million was contributed by business performance. Performance fees for the year amounted to $36.7 million.
  • The company reported statutory net profit after tax (NPAT) amounting to $28.0 million and normalised NPAT of $33.3 million for FY19.
  • VGI Partners Limited has paid a final dividend of 9.3 cents per share on 18 March 2020 to the shareholders, who were registered with the company on 6 March 2020. The dividend reflects a payout ratio of around 74% for 2H FY19 on normalised earnings
  • The company is focused on providing investors in the VGI Partners Funds with capital growth over the long term.

 

 

Stock Performance

The stock of VGI closed the day’s trading session at $9.600 per share on 17 April 2020, indicating a fall of 4% against its previous closing price. The market capitalisation of VGI Partners stood at $697.2 million with ~697.2 million outstanding shares. During the last three months and six months, the stock of VGI has generated returns of -18.37% and -39.90%, respectively.

Navigator Global Investments Limited (ASX:NGI)

Navigator Global Investments Limited is engaged in the provisioning of investment management products and services to investors globally via its wholly-owned subsidiary Lighthouse Investment Partners, LLC.

Investment Performance Affected AUM for March 2020 Quarter: For the quarter ended 31 March 2020, the total asset under management stood at US$11.98 billion against US$13.37 billion as of 31 December 2019. The investment performance had an impacted AUM. The company anticipate to witnessed increased redemptions in the short-term as clients decrease their hedge fund exposure to generate liquidity in their broader portfolios due to uncertainty from COVID-19 pandemic.

Decline in Management Fees During First Half

  • During 1H FY20, the company generated total revenue amounting to US$50.23 million, a drop of 8% compared to the prior corresponding period (pcp). The revenue comprised of Management fees and Performance fees amounting to US$46.568 million and US$3.662 million, respectively.
  • NGI witnessed a decline in management fees of 15% compared to the pcp due to (1) US$1.2 billion net outflows from MAS assets and (2) $336 million of AUM from investment performance.
  • The company managed to close the half-year with a robust balance sheet comprising a cash balance of US$35.1 million with zero loans and borrowings. For the same period, NGI declared an interim dividend of US$8.5 cents per share.
  • During 2H FY20, the company expects to witness the full advantage of the cost rationalisation, which was undertaken in November 2019.

 

Stock Performance

The stock of NGI closed the day’s trading session at $1.260 per share on 17 April 2020, indicating an increase of 3.279% against its previous closing price. The market capitalisation of Navigation Global stood at $197.82 million, with ~162.15 million outstanding shares. During the last three months and six months, the stock of NGI has generated returns of -59.74% and -52.16%, respectively.

Pinnacle Investment Management Group Limited (ASX:PNI)

Pinnacle Investment Management Group Limited is engaged in the development and operations of investment management businesses. It also provides distribution services, business support and acts as a responsible entity service to the Pinnacle Affiliates.

The company recently announced that Adrian Whittingham had made a change to their substantial holdings in the company by acquiring and disposing 400,000 and 375,000 ordinary shares on 26 March 2020.

Acquisition of 25% Interest in Coolabah Capital Pty Limited in 1H FY20

PNI recently notified the market with the operational and financial performance for 1H FY20 and outlined the following:

  • For the 1H FY20, the company reported net profit after tax (NPAT) from continuing operations amounting to $13.8 million, reflecting a rise of 36.6% from $10.1 million in 1H FY19. It posted net inflows for the period amounting to $2.0 billion, which include $0.9 billion retail inflows.
  • As on 31 December 2019, Aggregate Affiliates’ funds under management stood at $61.6 billion, implying an increase of 13.4%. During the half-year, it has wrapped up the acquisition of 25% interest in Coolabah Capital Pty Limited, which was financed by using debt facility from Commonwealth Bank of Australia.
  • At the end of the period, it reported cash and principal investments amounting to $44.7 million and fully drawn its facility of $30 million from Commonwealth Bank of Australia. To retain shareholders, the company declared fully franked interim dividend of 6.9 cps.

 

Stock Performance

The stock of PNI closed the day’s trading session at $3.270 per share on 17 April 2020, indicating an increase of 3.81% against its previous closing price. The market capitalisation of Pinnacle Investment stood at $583.9 million with ~185.37 million outstanding shares. During the last three months and six months, the stock of PNI has generated returns of -34.65% and -32.40%, respectively.


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