CBG Capital Limited (ASX: CBG), established in 2002 and based in Sydney, primarily invests in securities listed on the Australian Securities Exchange. The goal of the company is to provide its shareholders with maximised medium to long-term risk-adjusted returns through a balance of capital growth, distributions, a combination of rising share prices and a stream of fully-franked dividends payable half-yearly.
CBG recently provided the Interim Portfolio Valuation Update for the month of April 2019. Accordingly, the gross value of the Company’s investment portfolio has increased to $ 28.1 million with the close of business on April 30th as compared to $ 26.7 million as at March 31st, 2019. As a result, the gross return amounted to 5.2%. When compared to a portfolio value of $ 23.0 million as of December 31st, 2018, the current figures reflect an impressive gross return of 22.2% over this four-month period.
Besides, as per the on-market buy-back scheme, during the last month, the Company bought back 25,000 ordinary shares for $ 23,424 at an average price of $ 0.937 per share. A full NTA review is expected to be released to the market prior to May 15th, 2019.
On February 19th, 2019, the company also declared an ordinary fully paid dividend of AUD 0.017 which is scheduled to be paid out on May 23rd, 2019 with respect to the six months ended December’18.
The company’s underlying philosophy and style suggest that it has a disciplined investment approach that is executed by deploying a bottom-up fundamental analysis. The portfolio is primarily focussed on high-quality companies with a growth bias. Every year, the investment team holds over three hundred meetings with the listed companies in which CBG holds interest or are potentially considerable as an investment choice.
CBG also undertakes a comprehensive investigation process to decipher the particular drivers of value in each company and thereby recognizes opportunities where the intrinsic value is not reflected in the trending share price. Besides, CBG Capital’s experienced funds management team tries to perceive the security’s characteristics that produce attractive returns. They also formulate and deliver robust strategies to select companies that have a solid cash flow, generate decent shareholder value, have a supportive industry structure, a healthy balance sheet and good earning multiples associated with earnings risk and growth prospects.
As per the company’s business model, investments with a time horizon of more than three years are mostly sought so as to let the shareholders benefit in the long-term unlike the typical short-term seeking return of most equity holders.
Even though, the Australian equities market is highly concentrated in the largest valuation stocks, CBG’s mandate and the relative fund size allows it to invest more broadly and to gain greater exposure to the emerging companies. Thus, its portfolio comprises of at least 75% stocks from the S&P/ASX 200 Index.
In the last financial year FY18 (for the period ended 30 June 2018), the company reported as Profit After Tax of $2.38 million as compared to $932K in FY17. The company reported a healthy NTA figure of $ 1.065 at the end of FY18 as compared to 97.3 cents PCP. The company sold out various stocks and the proceeds were invested in potential profitable stocks such as Jumbo Interactive, Webjet, Noni B, James Hardie, Lovisa, Lynas, Wesfarmers and Woodside.
It also reported a 255% reduction in the loss after tax attributable to equity holders to $ 1.92 million and closed the half-year with a net cash of $ 3.06 million.
To date, CBG Capital’s market valuation stands at ~ AUD 25.37 million with ~ 26.15 million outstanding shares. On May 6th, 2019, the CBC stock settled at AUD 0.950. The stock’s YTD return stands positive at 6.59%.
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