With earnings on an improved trend over the past three years and having considered its strategic options, Lloyd Fonds AG (F:L1OGk) is looking to grow. The focus is now set on exploiting its experience and know-how in developing its established position in investment and asset management for real assets. It is targeting innovative fund offerings that will appeal to a competitive institutional market and a retail market that management believes will recover over time. The valuation is not building in a high expectation of AUM progress, and the shares offer an attractive dividend meanwhile.
Positive performance trend continuing
FY16 net attributable earnings of €3.2m were in line with the upwardly revised guidance provided in November 2016, continuing the trend of strong improvement that began in FY13. Management guides to further revenue growth in the current year, including a first-time contribution from the recently launched social housing investment vehicle, and a broadly flat result despite the absence of disposal and deconsolidation gains that contributed in FY16. Recognising the trend of improving group financial performance, the dividend increased from €0.07 per share in FY15 to €0.16.
Successful AUM growth the medium-term key
Management is now in a phase of seeking to capitalise on recent progress by implementing a new strategy for growing its investment and asset management activities. It has a medium-term goal of increasing AUM from c €1.4bn to c €3.0bn, despite the drag of existing funds running off. It sees strong growth potential in its innovative social housing vehicle (target €1bn AUM by 2022) with other fund projects, across a range of asset types, under consideration aimed at institutional and retail investors alike.
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