As at 25 September 2007, Mariner Bridge Investments had total investments of $317 million. This compares with $264 million as at 30 June. The split of investments by asset class was as follows:
| |
30 June $m |
25 September $m |
% of Total |
| Property |
36 |
43 |
14 |
| Infrastructure |
23 |
38 |
12 |
Leasing
- Shipping
- Aviation
- Office Equipment |
57
51
6 |
57
80
8 |
18
25
3 |
Fixed Income
- US Securitisations |
35 |
11 |
3 |
| - Natural Resources |
32 |
44 |
14 |
| - Other |
24 |
36 |
11 |
| |
264 |
317 |
100 |
Investment Activity
Significant changes in investment levels since 30 June 2007 included:
- Seven new investments totalling $69 million and increases in existing investments totalling $20 million. The new investments included an investment in a solar electricity facility in Spain and further investments in aircraft, shipping and property.
- Repayments of $12 million relating to investments in shipping and property.
- Reduction in the book value of US securitisation investments of $24 million. This reduction reflects cashflows received from these investments of approximately $3 million, as well as additional provisions of approximately $21 million. These extra provisions were taken as a result of a further deterioration in conditions in the US home loan market.
Excluding the deliberate reduction in the securitisation investments, total investments grew over the quarter by $77 million.
Provisions against the US securitisation investments now total approximately $31 million.
The Company has sought to deal with uncertainty in the securitisation market by aggressively provisioning the US securitisation investments based on an assessment of the individual transactions. Their book value now accounts for 3% of the Company’s investment portfolio.
Profitability Outlook
The Company’s net profit after tax (NPAT) in the current half year is expected to be materially higher than the previous half year. It is also expected that NPAT for the full 2008 year will fall within the current range of analyst forecasts of $20 million to $25 million, albeit towards the lower end of this range.
The Company’s ability to continue to deliver strong profit growth is due to:
- Expected pre-tax profits from the sale of some of the Company’s shipping investments of approximately $14 million, with these profits likely to be earned in the first half of the financial year; and
- Continued strong earnings from the remainder of the investment portfolio.
Capital Management
The Company has finalised an increase in its bank debt facilities from $130 million to $210 million. The increased facilities will be provided by the Company’s existing bankers, Commonwealth Bank, St.George Bank and BankWest, as well as by National Australia Bank, newly added to the banking syndicate. The lending margin for the Company’s debt will be unchanged.
At 25 September 2007, the Company had net borrowings of $71 million. New investments will be funded from borrowings and from ongoing repayments within the investments portfolio.
Mark Phillips, Managing Director of Mariner Bridge Investments, said: “It is clear that the majority of our investments have been delivering high returns. Our shipping investments have performed particularly strongly and the returns from most of our investments have exceeded our expectations. We have sought to draw a line under our securitisation investments with the latest set of provisions.”
“The changes occurring in the global credit markets should present the Company with attractive investment opportunities in its core asset classes over the next 12 months. We have good available liquidity via our increased debt facilities to take advantage of these opportunities.”
Investments Outlook
The Company’s pipeline of investments that meet its return target continues to be healthy. This pipeline is spread across the company’s core asset classes and origination partners. Board approvals for new investments stand at $94 million, with most of these likely to proceed over the next 6 to 9 months. The Company continues to expect total investments to exceed $375 million by December 2007.
Mariner Bridge Investments is a financial services company that invests in structured finance transactions. In essence, the Company invests in, or lends to, transactions backed by real assets, financial assets or cashflow, in the target asset classes of property, infrastructure, fixed income and leasing. Its objective is to build a diversified portfolio of investments that delivers high returns to shareholders.
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