High activity level and continued improved results
- The business model that was established in 2012 is functioning as planned and providing positive results
- EBITDA from operations of NOK 7 million and EBIT from operations of NOK 2 million, excluding transaction costs of NOK 5 million
- Capital base significantly strengthened through a rights issue of NOK 42 million
- Gross subscriptions of NOK 752 million, compared with NOK 275 million in the corresponding quarter last year
- Total AUM increased by NOK 5 billion since new year to NOK 57 billion. In the same period, customers’ equity has increased by NOK 3 billion to NOK 27 billion
- NOK 117 million raised for investment company Nordic Secondary II AS
- Investment Management and Capital Markets executed work with the sale of real estate portfolios in Sweden and the sale of property in Norway at a value of more than NOK 1 billion, and paid out NOK 700 million to clients in May/June
- Cost reductions equivalent to NOK 15 million per year implemented in Wealth Management, with full effect from fourth quarter of 2013
- Agasti acquires investment management company RS Platou Fund Management AS, strengthens its real estate team and increases AuM by NOK 1.5 billion
The Agasti Group achieved operating earnings of minus NOK 3 million in the second quarter of 2013, compared with minus NOK 12 million and minus NOK 4 million in the fourth quarter of 2012 and first quarter of 2013 respectively. Operating earnings continue to be partly influenced by costs resulting from the restructuring process and build-up phase that the Group is currently finalising.
“Profit trends in recent quarters show that this process is without a doubt moving in the right direction. The business model we established in 2012 is functioning as planned and is now providing positive results. At the same time, assets under management are continuing to increase as a result of the acquisition of Wunderlich Securities AS, positive market development, good management and the trust we have long experienced among our clients. Excluding costs associated with the recently completed rights issue and the work with the proposed acquisition of Wunderlich Investment Company, Inc. of around NOK 5 million, the company has an EBITDA from operations of NOK 7 million and EBIT from operations of NOK 2 million. The trend has turned, and our expressed ambitions are on the way to being fulfilled,” says CEO Alfred Ydstebø.
In addition to the results progressing in the right direction, Agasti has strengthened its capital base with NOK 42 million through a rights issue. This provides a solid financial platform for the further development of the Group.
“We now have a capital base that provides predictability and the necessary financial solidity in the work to optimise our business model. Some of the proceeds from the rights issue will be used to further develop the Capital Markets business area, which we regard as the key to establishing the institutional platform we believe is necessary in order to fully succeed in our ambitions. We are now optimistic about the future,” says Ydstebø.
The Group is also close to achieving the ambitions regarding organisation and restructuring outlined a year ago. Under the leadership of new CEO Bjarne Eggesbø, the company Obligo Investment Management has strengthened its team, which consists of some of the market’s most competent fund managers who manage a total of NOK 49 billion within the areas of real estate, shipping, energy, infrastructure and private equity. Two property portfolios were sold in Sweden during the quarter at a total value of SEK 910 million, and not least, NOK 700 million was distributed to the Group’s clients. In the period ahead, Obligo is planning to launch new portfolios within secondary units in real estate and property portfolios in London/the USA.
“In Obligo we have a fantastic starting point for being able to create good returns on our clients’ direct investments with us. The Obligo team has solid international experience and has also shown that the strong alliance with Wunderlich can be used positively in order to take over the management of larger, external portfolios,” says Ydstebø.
In the second quarter, Wealth Management has made adjustments to the organisation equivalent to NOK 15 million per year in reduced costs – the full effect is expected to be seen in the fourth quarter of 2013.
“While the organisation has been through an extensive cost reduction and restructuring process, our investment advisors and analysts have exhibited impressive moral and exceptional efforts. Equity under management for clients (EUM) increased by almost NOK 350 million during the quarter and NOK 3 billion in the first six months of the year,” says Ydstebø.
In a turbulent summer market we raised NOK 117 million for Private Equity company Nordic Secondary II AS.
“These are levels that we are very satisfied with for a period with a turbulent market, and there are extremely few Wealth Management environments that can show an equivalent development during this period,” says Alfred Ydstebø.
Agasti Wunderlich Capital Markets is about to complete the establishment of its organisation, and in recent months has continued to recruit extremely competent employees within areas such as Corporate Finance. The company has simultaneously continued the positive development of the organisation and its strategic alliance towards the USA, where the ambition is to create an institutional platform and strive for attractive mandates in both the Nordic region and the USA. The company has an attractive pipeline, which will contribute positively to profit trends for the Group going forward.
Even though the acquisition of Wunderlich Investment Company, Inc. was not completed, the company’s ambitions regarding the cross-border activities remain unchanged.
“All members of the Board and management believed and still believe that an integrated ownership would have strengthened the strategic alliance and contributed to us more quickly establishing an institutional platform, which in turn would have been positive for future earnings. However, we respect that support for this was not broad enough among the shareholders. It is important to state that we have all the prerequisites for success with our ambitions in the USA even without integrated ownership, which we have confirmed through the work of recent months. However, without integrated ownership, it will take us longer to achieve our goals,” says Deputy CEO Jørgen Pleym Ulvness.
The Agasti Group, through Obligo Investment Management AS, acquires investment management company RS Platou Fund Management AS (formerly Realkapital Partners) and their highly-regarded team led by Morten Kampli. The acquisition price is NOK 4.5 million plus profit share the next 36 months depending on future development. RS Platou Fund Management AS currently has a portfolio consisting of companies investing in real estate and other investment products with a focus on identifying discounted investment opportunities in the secondary market within property funds, real estate debt and listed property companies. The funds have more than 1,500 investors and the company manages real estate investments equivalent to approximately NOK 1.5 billion. This will now become a part of Obligo’s real estate portfolio, which will consequently exceed NOK 40 billion in assets under management.
A complete English version of the interim report of the second quarter and first half of 2013 is attached on www.newsweb.no and on Agasti's Investor Relations web pages www.agasti.no .
CEO Alfred Ydstebø, mobile phone: (+47) 908 32 828
CCO, Tor Arne Olsen, mobile phone: (+47) 900 90 470
CFO, Christian Tunge, mobile phone: (+47) 450 65 850
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.