GARDA Capital Group (ASX:GCM) anticipates generating underlying operating activity earnings of $1.2 million after tax for FY18, a 39% increase on FY17.
The company is a real estate investment and funds management group and generate revenues from funds management and debt advisory functions.
Funds management revenues are primarily derived from fees based on assets under management (AUM).
AUM increases 43.5%
AUM has primarily increased in H2FY18 as a result of the settlement by GDF of two acquisitions
The AUM at the end of FY18 is expected to be $270 million, representing a 43.5% increase on the $188 million that GARDA commenced the financial year at.
Furthermore, with the construction of the Botannica 9 project expected to complete in FY19, a further 13% AUM growth to $305 million is already embedded into that financial year.
Increased AUM flows through to earnings
Updated FY18 earnings guidance forecasts a 317% increase in underlying operating activity earnings before tax to $1.6 million.
It also projects a 39% increase in underlying operating activity earnings after tax to $1.6 million.
Actively pursuing new investments
GARDA’s chairman and managing director Matthew Madsen said: “FY18 has been an important year for the Group.
“AUM will increase by approximately 43.5% over the period with a further 13% AUM growth in FY19 from the completion of the Botanicca 9 project alone.
“We have been able to demonstrate strong returns on capital within an appropriate commercial risk tolerance.
“Moreover the FY19 results are expected to be positively impacted by the growth in AUM to $305 million compared to the average AUM of FY18 of $218 million and also, the particularly strong contribution from capital expenditure fee revenue.
“We have a strong balance sheet, currently holding $8 million in cash. We are actively pursuing new real estate debt investments and considering further acquisitions for GDF.”