I think the CAF story is still very much under the radar. Growth will come from three areas: 1) ongoing growth in funding division. CAF are up against institutions who are slow moving. I'd back de Zwart and the team over these institutions. CAF are on the ground developing stronger relationships with brokers, the institutions aren't, at least not to the extent CAF are. I'm expecting growth well above market here for some years to come. 2) continue to clean up the wealth division. Focus on clients. I suspect there is still a lot of room for improvement here. 3) FUM growth. Some indications in articles suggest its early days for this part of the strategy but there is an opportunity to grow FUM substantially, have the advisers focus on giving advice and CAF focus on developing quality products and growing FUM.
At least 20% underlying profit growth hinted at, quality management who are well incentivised, dividends to come (and grow), competing against slow moving institutions. I think it looks quite good so we'll see what happens over the next 12 months.
CAF Price at posting:
50.0¢ Sentiment: Buy Disclosure: Held
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