360 Capital’s strong FY15 result and guidance for the FY16 highlights the company’s continuing and successful transition into a co-investor and fund manager, with recurring income streams from its co-investment and funds management activities more than doubling over the reporting year
360 Capital’s FY15 has delivered a strong FY15 result with revenues up 34.4% to $25.4m, operating EBIT up 49.2% to $19.7m and operating profit before tax up 20.6% to $15.2m. Co-investment and funds management revenues more than doubled from $9.1m in FY14 to $19.2m in FY15 reflecting the increased investment in underlying 360 Capital funds and associated distribution income as well as growth in funds under management. ‘Active’ earnings of $10.7m were generated through the takeover of the Diversified Fund and profit on sale of the Hurstville property.
Source: 360 Capital
Funds under management (FUM) grew by 27.6% to $1.2bn, with listed funds continuing to be the Group’s growth area, up 44.6% over FY15. Assuming no FUM growth in FY16, recurring fee revenue is forecast to grow by 21.3% from $6.3m to $7.7m. Over time, we expect to see an increasing proportion of recurring revenue generated by the Group from increased FUM as well as the stable distribution income expected to be generated from its investments in underlying 360 Capital funds.
Look-through gearing has increased from 35.8% to 53.9% due to the settlement of retail fund assets (Rockhampton – 27 June 2015 for $50m) prior to equity sell down as well as settlement of disposal of Hurstville asset ($47m) in September 2015. While the FY15 look-through gearing level is very close to the bond incurrence covenant level of 55%, we understand that this is a temporary issue, and post the Retail Fund equity sell-down and settlement of Hurstville (later this year) the look-through gearing level is forecast to be around 35%.
The Group is well positioned to access additional equity and debt funding to fund its activities. A total of $500m of cumulative equity has been raised across the 360 Capital Group (including the underlying funds) over the past three year. Across the Group, there are also $561.4m in debt facilities from three Australian banks as well as the Group’s $75 bond issue. The overall platform has $89.4m of headroom within the funds and access to approximately $500m in debt capacity from existing banking relationships if required. All funds are in compliance with their debt covenants per the figure below and fully distributing and 75% of funds under management are now ASX-listed.
Source: 360 Capital
The full results are available at 360 Capital investor centre
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