Blue Sky Alternative Investments Limited

Decent FEAUM and FUM Performance in Q1FY19: Blue Sky Alternative Investments Limited (ASX: BLA) is diversified alternative asset manager in Australia with the specialization of managing investments across four major alternative asset classes i.e., real asset, private equity, private real estate, real assets, and hedge funds.  Recently, the company posted a decent FEAUM and FUM Performance in Q1FY19 wherein fee-earning assets under management (FEAUM) grew by ~2.9% to $3.51 Bn from the prior quarter 30 June 2018 where it was $3.41 Bn. In addition to this, fund under management (FUM) increased by ~2.9% and amounting to $2.87 Bn in Q1FY19 over the prior quarter. Besides this, the company entered into an Implementation Deed to terminate the management services agreement between the listed investment company, i.e., Blue Sky Alternatives Access Fund and BSAAF Management Pty Ltd. The objective of this separation is to reduce the group’s FEAUM and FUM of Blue sky by around $18.2 Mn which represent the uncommitted cash component of BAF’s portfolio at 30 September 2018. The effective date of the deed is 31 December 2018.

FY18 was a very disappointing year for the company wherein operating revenue was down by 56.1% on Y-o-Y basis. Revenue was impacted mainly due to rapid and contagious loss of market confidence in its business and change in market conditions. Further, operating costs were abnormally inflated 113% to $98.2 Mn in FY18 from the prior year because of the business disruptions, and consequential restructure incurred during the same period. As a result, BLA has reported for turnaround loss after income tax $70.646 Mn in FY18 from positive PAT of $20.63 Mn in last year, representing a significant disruption to operations, asset review and business restructuring during the period. On the analysis front, EBITDA margin and net margin turnaround negative 203.4% and 224.2% in FY18 from positive 34.3% and 29.9%, respectively in last year. To mitigate the challenges, the group focuses on enhancing governance, valuation, compliance & risk management frameworks, and recurring management fees to exceed fixed operating costs.


Five Year Financial Metrics (Source: Company Reports)

On the other hand, the group announced that its CFO, Matthew Whyte has resigned. In interim basis Ms. Naomi Rule will act as a CFO of the company.  BLA’s ROE as at 2018 was reported at negative 47.2% against positive 15.2% as at 2017; and Debt to Equity Ratio as at 2018 was 0.59 and as at 2017, the same was 0.38. As of now the stock is under short selling radar with over 4.84% (as at 26 November 2018). Meanwhile, the share has fallen 43.4% in the past three months as at November 29, 2018 and is trading towards the lower range.  Based on mixed updates and current trading scenario, we have a wait and watch view on the stock at the current market price of $1.025 (down 2.381% on November 30, 2018.  
 

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.