Augusta Capital has reported a significant drop in first half profit and revenue.
The property developer and management company’s net profit was down 68 percent in the six months to September to $1.6 million, with revenue down 51 percent to $6.3m.
The company said the result was in line with last month’s trading update, which warned of a materially lower result.
The fair value of the company’s Asset Plus investment rose by $1.6m, while net management fees increased by 16 percent to nearly $3m, reflecting growth in managed funds, primarily the Asset Plus and Augusta Industrial Fund.
It said the result was due to a number of factors, including the timing and investment into new funds and assets, as well as the divestment of the Finance Centre and increased corporate costs relating to the company’s growth strategy.
“Launching new fund initiatives involves considerable work in order to ensure they can deliver the target investment fundamentals and this requires ongoing investment in people and the use of the balance sheet,” managing director Mark Francis said.
“At this point in time, the board expects earnings for the 12 months ended 31 March 2020 to be materially similar to the prior year, however, these numbers are contingent on deal flow,” he said, adding the pipeline for long-term growth was in good shape with a busy period ahead.
He said the company had made significant progress made towards the establishment of a diversified fund and a tourism fund over the six months, which was not reflected in the first half result.
This article was originally published on RNZ and re-published with permission.