Clime Investment Management Limited (ASX: CIW) is an ASX listed diversified and independent fund manager in Australia. The company offers services like fund management, administration services, portfolio management services etc. to its global clients. The company also provides private wealth advisory and investment solutions to High Net Worth Individuals.
On 21st March 2019, the company released a shareholder update regarding its 1HFY19 results with an operational update and outlook. During the period, the company made some changes in the management, Mr Rod Bristow was appointed as a CEO in September 2018. The founder Mr John Abernethy remains as the Director of CIW, Chairman of Clime Capital Limited and advising in a ‘Chief Economist’ role.
The company also executed some of the strategies in the second half of the year ended December 2018 as follows: DIY investor platform has been upgraded, and the capability of the executive team has been Improved. Also, on 18th November 2018, the company launched its new service Private Wealth advice. The company took notice of the investment process and methodology and Standardised them. Finally, it is approaching third-party distribution for broader reach.
1HFY19 Financial Performance
The revenue of the company has marginally increased by 1% and stood at $5.2 million in 1HFY19 compared to the previous corresponding period (pcp) reported revenue of $5.16 million. The expenses, on the other hand, grew more rapidly by 16% and was reported at -$4.65 million compared to -$4.02 million in the pcp. These expenses included the expenses incurred, to run the newly launched Private Wealth Advisory services, which accounted for $949,000. The operating profit fared by more than -52% on the downside. In 1HFY18, the operating profit stood at $1.13 million, while it dropped to $550,000 in 1HFY19. This drop in Operating profit resulted in the fall of statutory Net Profit After Tax (NPAT), which fell from $590,000 to $214,000 in the pcp, a noted fall of -64%.
Due to the fall in net profit, earnings per share (EPS) also fell by 0.7 cents per share and was recorded at 0.04 cents per share in 1HFY19, compared to the pcp of EPS of 1.1 cents per share in 1HFY18. The dividend also decreased (led by decreased profits) to 0.75 cents per share from 1.5 cents per share in the same period.
The company showed a stronger relative performance in the assets under management (AUM) side. The AUM increased by $5 million from $811 million in 1HFY18, it was standing at $816 million in 1HFY19, despite challenging December quarter for investment markets. The cash and cash equivalent of the company also grew steadily from $4.24 million in the pcp to $4.31 million.
The management stood positive on the performance of the company and has given an outlook which was full of confidence. The company will look forward to Mergers and acquisitions that deliver scale and optimise operational leverage. The company has already expanded the client advisory through Private Wealth advice. The upgraded DIY platform is scheduled for Rebranding in H2, which is expected to increase the subscriptions.
On the technical front, the stock of the company has last traded at A$0.47, as on 19 March 2019. It has given a steady return of 4.4% over the last one month, while YTD return is marginally lower by 1%.
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