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Blue Sky Alternative Investments Limited (ASX:BLA) announced its 1HFY19 results today. The restructuring plan undertaken by the company is taking a toll on its operating numbers. The company reported an underlying Net loss after tax of $25.7 million. The company had exited its retirement living portfolio in October 2018 and closed its hedge fund business in December 2018. The company has also planned to exit its residential and management rights portfolios based on the prevailing market conditions; the same is expected to be completed in 12 months.
Key 1H FY19 Results Summary:
- Operating Revenue of $16.6m in 1HFY19 vs. $38.3m in 1HFY18.
- Underlying Net profit after tax -$25.7m in 1HFY19 vs. $16.1m in 1HFY18.
- Underlying Net Tangible Assets was $101.3m as at 31 December 2018.
- Fee-Earning Assets Under Management was $3.0 billion at 31 December 2018 vs. $3.4 billion at 30 June 2018.
- Cash position was $54.8m as at December 2018, including the drawdown of net $47.7m convertible note facility with Oaktree Capital Management L.P.
The company had seen a major change in its management and board of directors in 1HFY19.Five new Directors were appointed to the companyâs Board in 1HFY19. Andrew Day was named as the Executive Chairman. CFO and Chief Risk Officer were also appointed in 1HFY19. John Kain stepped down as a Non-Executive Director.
BLA Executive Chairman, Andrew Day, acknowledged that the first half results were disappointing due to the restructuring of the business. However, he also stated that these changes would enable the company to return to sustainable profitability more quickly.
Business Unit Performance:
Real Assets: This segment achieved overall realised returns of 21.9% per annum (net of fees) in the five years to 31 December 2018 and FEAUM of $1,166.7 million as at 30 December 2018. Deployment is progressing across a portfolio of water entitlements, private equity farmland developments, and agricultural supply chain infrastructure.
Private Equity: This segment witnessed three investment exits during 1H FY19. The companyâs private equity business achieved overall realised returns of 19.9% per annum (net of fees) in the five years to 31 December 2018 and FEAUM of $502.0 million at 31 December 2018.
Private Real Estate: This unit has managed to achieve overall realised returns of 17.8% per annum (net of fees) in the five years to 3q December 2018 and FEAUM of $728.5 million at 31 December 2018. This business successfully exited six retirement living funds.
US: The US business reported a FEAUM of $548.9 million at 31 December 2018 and has recached an agreement to sell its 38% interest in Cove.
The Outlook for H2 FY19:
The company is expecting a slew of activities in the second half of FY19. The company is expected to appoint a new CEO; the company is also undertaking a rebranding of the business to reflect its new discipline, focus, and approach. The company also has stated that in H2 FY19, it would Re-engage with High Net Worth and Family office investor base across Australia.
Stock Information:
BLA share price was down by 6.250% on the ASX, settling the dayâs trade at A$0.750 on Thu 28 Feb 19. The share price has dropped by around 21.95% in the last three months.
Blue Sky Alternative Investments LimitedâS (ASX:BLA) Market capitalization stands at $62.17 million. The Stock has noted the 52-week low price of A$ 0.640 and the 52-week high price of A$13.200. The company has an EPS of -0.992 AUD.
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