its not that they over estimate, CGF have kept constant guidance (even with the release of 1hfy25 earnings) for FY25.
Its how CGF have to legally account for the statutory numbers. Under their underlying earnings, the earnings was a miss, but a small miss, a couple of %.
As Madamswer says their earnings is a 'black box', part of this is all the complexity in complying with the various accounting standards on valuations, the other is 'mark to market' at years end of all securities values, the other which hasn't been mentioned is the movement in 'hedging derivatives'.
Remember the kerfuffle with Liz Truss in the UK with the bond blow up and how this could 'wipe out' the bond market. Well this is because of the 'hedging derivatives'. Life insurance companies 'hedge' the positions, those 'hedges blow out', serious losses can be incurred.
Until bond markets calm down, CGF is exposed (its not the rate that matters, its the wild swings against expectations that matter).
The other point is the mark down on property holdings. I don't know CGF implied cap rates on property investment. But as we can see from the REIT sector, REIT share price is still trading below reduced property valuations (higher cap rate), this will have to play out. Anyway for me, as the property write down effects Stat earnings, the yield on the property rises.
CGF Price at posting:
$5.58 Sentiment: None Disclosure: Held
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