Navigator Global Investments Limited (ASX: NGI) held its annual general meeting on 28 November 2018. The chairman of the company Mr. Michael Shepherd addressed the shareholders at the AGM by discussing the key achievements during the 2018 financial year.
He informed that during the year, the company negotiated an agreement with Mesirow Financial Services for the acquisition of rights to manage the assets of their Mesirow Advanced Strategies business. The transaction was settled on 1 July 2018, and at that time brought an additional $5.39 billion of assets under management to the Navigator Group.
The company is expecting some higher up-front costs to be incurred in the first year of transition, particularly in regard to additional information technology costs. The company’s focus is to integrate MAS into its existing operations, ensure a smooth and complete transition of all client and investment data, as well as retain key staff who joined Lighthouse on 1 July 2018. The company is expecting that it will lose additional assets from the transitioned MAS clients over the next 1 to 2 years. Currently, the company does not know exactly how much this will be or the timing on when it will occur, but the company is considering that retaining approximately 75% of the initial $5.4bn transitioned would be a reasonable result.
Aside from MAS transaction, 2018 was the company’s most successful year ever in terms of net inflows. The company’s growth was driven by its customized solutions business. Japan and the Middle East were the key sources in FY 2018, and the company is expecting that these regions will drive the company’s future growth. The company declared total dividends of US 16 cents per share for FY 2018 which is 14% higher than the prior year and represents a dividend payout ratio of 76% of the 2018 financial year’s EBITDA.
While discussing the operating performance in FY18, the chairman informed that the core investment management operating activities increased by 10 percent in FY 2018 to $33.6 million as compared to FY2017. During FY 2018, the company also earned higher performance fee revenue due to the higher proportion of company’s AUM being able to earn performance fees that have been the case historically, coupled with positive investment performance in the relevant portfolios across the year.
The overall costs of the company were higher by $9.6 million in 2018 compared to 2017. The largest component of this relates to staff costs and reflects the fact that the company grew its staff numbers to 90 people as at 30 June 2018. Mr. Michael noted that in the upcoming year, the company would be focusing to ensure smooth integration of the MAS clients into the existing Lighthouse operations and it will also be looking at the opportunities for expanding the business if and when they arise. Following the AGM, the share price of the company increased by 1.121 percent as on 28 November 2018.
In the last six months, the share price of the company increased by 7.21 percent as on 27 November 2018. NGI’s shares traded at $4.510 with a market capitalization of circa $723.18 million as on 28 November 2018 (AEST 2:18 PM).
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