- Investment portfolio steady at $422 million
- First quarter investment returns in line with expectations
- Earnings guidance for 2009 reduced due to possible problem loan
Keybridge’s total investments as at 26 September 2008 were $422 million.
The split of investments by asset class was as follows:
| |
30 June
2008
$m |
30 September
2008
$m |
% of
Total |
| Property |
98 |
103 |
24% |
| Aviation |
118 |
120 |
29% |
Shipping
|
73 |
65 |
15% |
Infrastructure
|
54 |
56 |
13% |
| Other |
75 |
78 |
19% |
| |
418 |
422 |
100% |
During the past three months, new investments made by the Company totalled $33 million. Activity was spread across all asset classes but principally involved new loans against Australian property. Offsetting these new investments were repayments of $29 million, predominantly from property and shipping transactions.
The average return to Keybridge from the transactions repaid in the September quarter was in excess of 20% per annum for the period of the Company’s investment.
Over the remainder of this financial year, Keybridge is anticipating further investment repayments of at least $50 million.
The Company has 32 individual investments. The average investment size is $13 million. Investments are diversified across industries, locations and counterparties in accordance with Keybridge’s transactional risk management policy.
Investment Performance
The balance of supply and demand in the property, aviation, shipping and infrastructure markets in which Keybridge participates, in general, has been sound. As a result, average returns across the Company’s investments in the first quarter of the financial year were in line with expectations.
Uncertainties prevail, however, in both financing and economic conditions. Thus, the Company continues to be vigilant in the management of its investment portfolio. The Company reported two provisioned loans as at 30 June 2008. Since then, the overall performance of these loans has been consistent with the level of provisioning taken to account.
The Company has an additional loan that may require provisioning. This is the subject of a separate announcement today.
Capital Management
The Company currently has $476 million of available capital. This comprises contributed equity of $261 million and committed debt facilities of $215 million provided by Commonwealth Bank, BankWest, St.George Bank and National Australia Bank. The debt facility matures in June 2011.
The terms of the debt facility are unchanged and the key covenants (comprising minimum tests for interest cover and shareholders funds and a maximum test for debt as a proportion of assets) continue to be met comfortably.
As at 26 September 2008, the Company had cash and undrawn debt of $54 million.
The Company is progressing development of its funds management platform. The current market environment provides challenging fund-raising conditions but we remain confident of initiating funds under management over the next 12 months.
Outlook
General market conditions in this first quarter of the financial year has been characterised by a constrained availability of debt and equity finance and by an overall negative outlook for the global economy. The Company expects this environment to prevail throughout 2009. As a result, we will continue to manage actively the existing investment portfolio and look to maintain a liquidity buffer within the Company.
Whilst the bulk of the Company’s investments are performing in line with expectations, the possible additional provision, noted under the separate release today, means that earnings for 2009 are now anticipated to be around 10 to 11 cents per share |
