Release Date: August 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Omni Bridgeway Ltd (IMMFF, Financial) reported a net profit after tax before NCI of $30.5 million, up $29.6 million compared to the previous financial year.
- Operating expenses for the year were $89.7 million, well below the target of $95 million, reflecting an 8% reduction from the previous year.
- The total portfolio fair value increased to $2.8 billion, up $300 million from the half-year results.
- The company achieved a record 77 full and partial investment completions, with a multiple on invested capital (MOIC) of 2.7 times and an internal rate of return (IRR) of 53%.
- Omni Bridgeway Ltd (IMMFF) successfully raised and launched Fund 8 and achieved the first close for Funds 4 and 5 series II, with all existing fund investors recommitting.
Negative Points
- Investment income and fee revenue were $277 million, down 10% year on year.
- The company faces liquidity concerns, with known income of around $70 million and known outflows of $170 million, resulting in a $100 million shortfall.
- The share price development does not yet reflect the progress made, indicating a valuation gap.
- The company has experienced seven consecutive years of statutory losses, totaling approximately $250 million.
- The transition to a capital-light fund management model has led to delays in performance fees and capital return, affecting shareholder value.
Q & A Highlights
Q: Could you elaborate on why you feel comfortable with your liquidity position despite known outflows exceeding known income?
A: We have over 12 months of liquidity before collecting from new completions. We're also looking at secondary market transactions to provide additional liquidity. (Guillaume Leger, Global Chief Financial Officer)
Q: What's the outlook on secondary market transactions?
A: We are always in the market discussing these transactions. We will announce them only when they are binding or closed. (Raymond van Hulst, Managing Director & Chief Executive Officer)
Q: Can we consider the $85 million forecast for operating costs in FY25 as a new base?
A: Ideally, we would keep it at $85 million without further inflation for the following year. There are ongoing initiatives to optimize expenses, which may take time to reflect fully. (Raymond van Hulst, Managing Director & Chief Executive Officer)
Q: How significant will the outside equity interest payments be next year?
A: It depends on which cases complete and in which funds they sit. Statutory accounting is unfavorable to our transition process and doesn't reflect the value accruing for shareholders. (Raymond van Hulst, Managing Director & Chief Executive Officer)
Q: Is the 170% ROIC on improved pricing for new commitments in FY24 sustainable?
A: We expect the ROIC on the current book to continue tracking higher, driven by increased pricing and structuring. We aim to maintain and improve our long-term track record. (Raymond van Hulst, Managing Director & Chief Executive Officer)
Q: Can you provide an update on the capital raising for funds 4/5 series II?
A: We are fully on track, with several LPs currently in diligence. The process is normal, and we have already had a few secondary closings. (Raymond van Hulst, Managing Director & Chief Executive Officer)
Q: Can you explain the movement in the existing portfolio fair value?
A: The movement combines effects of FX, discount unwind, and material litigation events. We can provide a detailed breakdown offline. (Raymond van Hulst, Managing Director & Chief Executive Officer)
Q: How much of the $800 million fair value completion target for FY25 can be ascribed to funds 2 and 3?
A: It's difficult to give an exact number due to the probability-weighted nature of fair value. However, a significant portion of completions are expected from funds 2 and 3. (Raymond van Hulst, Managing Director & Chief Executive Officer)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
