As at 31 March 2008, Keybridge had total investments of $423 million, up 13% from the level at 31 December 2007.
The split of investments by asset class was as follows:
| |
31 December
2007 ($m ) |
31 March
2008
($m) |
% of Total |
| Property |
92 |
108 |
25% |
| Infrastructure |
39 |
40 |
10% |
Shipping
|
53 |
73 |
17% |
Aviation
|
107 |
124 |
29% |
| Natural Resources |
39 |
29 |
7% |
| Other |
45 |
49 |
12% |
| |
375 |
423 |
100% |
Investment Performance
Notable changes in investment levels in the three months to March 2008 have been:
- Increases in shipping, as a result of further investments in freight carrying vessels leased to creditworthy shipping companies.
- Growth in aviation, arising principally from an increase in the Company’s mezzanine loans supported by wide body passenger aircraft leased to large international airlines.
- An increase in property, arising from mezzanine loans which are well secured by residential and commercial projects in the eastern states of Australia and, for one loan, in the US.
- A reduction in exposure to the natural resources sector following the partial repayment of one of the Company’s investments.
The Company has 32 individual investments for an average investment size of $13 million. In accordance with Keybridge’s transactional risk management policy, these investments are diversified across industries, locations and counterparties.
The overall performance of the investments portfolio, including current average returns, is in line with expectations.
Capital Management
The Company has approximately $475 million of available capital. This comprises equity of approximately $265 million and committed debt facilities of $210 million provided by Commonwealth Bank, St.George Bank, BankWest and National Australia Bank.
As at 31 March 2007, the Company had cash and undrawn debt of $49 million.
There are no minimum market capitalisation requirements in the Company’s debt facilities and all existing covenants are being satisfied comfortably. The loan facility matures in December 2009.
The Company has locked-in the bank bill component on $125 million of its borrowings at an average rate of 7.19% pa for an average term of 4 years. In addition, the principal and income of all foreign currency denominated investments continue to be hedged back to Australian Dollars.
Initiatives are being advanced for the development of funds management activities in one or more of the Company’s core asset classes. It is anticipated this could result in new funds under management of at least $50 million over the course of calendar year 2008.
The Company’s net tangible assets as at 31 March 2008 were as follows:
| Net Tangible Assets |
$265 million |
| Shares on Issue |
172.1 million |
Net Tangible Assets Per Share
|
$1.54 |
The Company’s share trading policy prohibits its Directors from providing Keybridge shares as security for borrowings.
Outlook
The Company anticipates that disruption in global capital and equity markets will continue for at least the next 3 to 6 months. In response, the Company is seeking to balance the growth of its investments portfolio with the preservation of a prudent level of liquidity. Taking into account investment repayments of approximately $20 million which are anticipated to occur over the next 3 months, total investments are expected to be in the range of $410-440 million by June.
Consistent with previous guidance, the Company expects its net profit after tax for the full 2008 financial year to be least $20 million. This equates to earnings per share of just over 11 cents.
Longer term, the Company expects that the tightening of lending standards by banks and the increase in pricing for risk in the market will benefit Keybridge through a continued flow of attractive investments. We remain confident of growing the Company’s earnings per share over the next two to three years.
Keybridge Capital is a financial services company that invests in, or lends to, transactions backed by real assets, financial assets or cashflow. Its core asset classes are property, infrastructure, shipping and aviation. The Company’s objective is to build a diversified portfolio of investments that delivers high returns to shareholders. |
