02-06-2014, 06:47 PM
I am a big fan of this company from an operating standpoint but $3 fair value looks very high to me. At the moment market cap is ~S$1.5bn which includes say ~$40m net cash and ~$250m of REIT holdings implying you are paying around $1.2bn for the funds management business. This works out to about 20x PE at current share price, which seems pretty fair considering
a) underlying growth is driven by AUM growth, and ex-acqusitions growing AUM by 10% a year would seem like a pretty good outcome
b) we're running the risk of a property correction/crash which would have a relatively small immediate impact on ARA but dent sentiment towards the asset class, making future fund raising more difficult
Q1 results were released a while ago - the administrative expense number looked surprisingly high, but some of this is probably related to the material performance fees realised in Q413 and should hopefully normalise back down to around the $10m/qtr level for the remainder of the year. The rest of the result didn't seem too surprising to me, any thoughts from other holders here?
A big headwind for growing NPAT in FY14 will be the material $15m of acquisition/performance/advisory fees earned in FY13. If there's not similar 'windfall' fees in FY14 then headline NPAT will probably be flat to down even if AUM continues to grow.
(vested)
a) underlying growth is driven by AUM growth, and ex-acqusitions growing AUM by 10% a year would seem like a pretty good outcome
b) we're running the risk of a property correction/crash which would have a relatively small immediate impact on ARA but dent sentiment towards the asset class, making future fund raising more difficult
Q1 results were released a while ago - the administrative expense number looked surprisingly high, but some of this is probably related to the material performance fees realised in Q413 and should hopefully normalise back down to around the $10m/qtr level for the remainder of the year. The rest of the result didn't seem too surprising to me, any thoughts from other holders here?
A big headwind for growing NPAT in FY14 will be the material $15m of acquisition/performance/advisory fees earned in FY13. If there's not similar 'windfall' fees in FY14 then headline NPAT will probably be flat to down even if AUM continues to grow.
(vested)