1. capital is only just below the upper end of target multiple of required capital. This removes the risk of another value destroying placement and leaves open the possibility of either higher dividend payments or a modest share buyback in the near future
2. dealing with their mistakes (of which there have been too many) and focusing on the bank issue
3. there was full transparency over the problems
4. CGF will be a clear beneficiary of higher interest rates (once they are through the short term pain of mark-to-market losses on investments)
I did not like:
1. focus in "normalised" results (I've seen too many companies try and obfuscate bad results by focusing on normalised or adjusted numbers not to be cynical about this)
2. final dividend was the same as the interim. Yes, it's close to the upper limit of the target range but even an extra half cent would have sent a much stronger message
3. AUM shrinking. I know this is in part (or possibly fully) due to market movements but it leaves a smaller pool of assets to generate returns for the current financial period
4. too much waffle in the outlook section - if a company is not focused on NPAT (i.e. what is attributable to shareholders at the end of the day) it feels like their massaging things by inflating the numbers
On balance, I was not impressed (and I don't expect a lot of love from the brokers either).
I've downgraded my sentiment from buy to hold.
CGF Price at posting:
$6.32 Sentiment: Hold Disclosure: Held
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