MANAMA: Investcorp, a Bahrain-based alternative investment manager, has reported net income of $131 million for the 12 months ended June 2019, up five per cent compared with $125m for the 12 months ended June 2018 (FY18).
The firm said the solid set of results have come despite a slowing macroeconomic backdrop and increasing trade and geopolitical tensions.
On a fully diluted basis, earnings per ordinary share were $1.47 for FY19, up 13pc from $1.30 for FY18 while total comprehensive income of $124m for FY19 was 3pc higher than $121m in FY18.
Assets under management (AuM) increased by $1.9 billion to $28.2bn during the period.
Investcorp attributes the financial and operating performance to continued progress in delivering on strategic objectives of reaching AuM of $50bn over the medium term via both organic and inorganic initiatives.
Executive chairman Mohammed Alardhi said: “Our strong full-year results and ability to deliver on several strategic initiatives demonstrate resilience and focus on strategic growth and profitability goals, despite various economic and geopolitical challenges. Our expansion into new geographies, such as China and India, and new products, such as direct lending and infrastructure, is mirrored by similar ambitions in diversifying our client base, both by geography and segment.
“The ambitious growth strategy of reaching $50bn in AuM over the medium term is unchanged as we remain focused on delivering profitable growth, while retaining a prudent approach to balance sheet and liquidity management.
“We are well-positioned to continue delivering superior shareholder value and interesting investment opportunities for our clients.”
Gross operating income was $465m in FY19 compared with $454m in FY18.
Fee income was $376m, up 17pc compared with $321m for FY18 as AuM fees grew by 5pc from $173m to $181m and deal fees increased to $195m, up 32pc from $148m in FY18.
This was offset by lower asset-based income of $106m (excluding fair value change of a legacy investment) down 23pc compared with $137m in FY18, largely attributable to lower private equity returns.
Operating expenses for FY19 were $268m, up 5pc compared with $256m in FY18 resulting in a stable cost-to-income ratio of 65pc.
Interest expense for FY19 was $51m, down 9pc from $56m in FY18 due to a decrease in average outstanding debt and a more favourable funding mix.
AuM increased by 7pc to $28.2bn as compared with $26.3bn as of end-June 2018.
The increase was across all the business lines with India contributing $387m.
Associates’ AuM, not part of the consolidated AuM figures, stand at $5.7bn.
Investcorp remains well capitalised with total assets of $2.4bn as of end-June down 5pc from $2.5bn as of end-June and total equity of $1,145m as of end-June up 2pc compared with $1,123m as of end-June, 2018.
The level of co-investments reduced by 12pc to $1,017m from $1,162m as of end-June 2018.
The firm’s capital adequacy ratio of 33.8pc, up from 31.5pc as of end-June 2018 is more than double the requirements of the Central Bank of Bahrain (12.5pc).
Gross and net leverage ratios have further improved to 1.1x and 0.4x respectively from 1.3x and 0.5x.
Proposed dividend increased by 25pc to $0.30 per share from $0.24 in FY18 while the firm’s return on equity also increased to 12pc from 11pc in FY18.
Fully diluted book value per share increased by 9pc from $12.13 to $13.26.
Total accessible liquidity increased to $1.1bn as of end-June from $1bn as of end-June 2018.
During FY19, Investcorp has amended and extended one of the revolving credit facilities resulting in an upsize to $436m from $425m, improved economics, and extended maturity to 2023 with an option to ask for an additional year extension.
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