ARA Asset Management posted improved fourth quarter earnings and proposed a cash dividend and a one-for-five bonus issue.
The real estate fund manager, tied to Hong Kong tycoon Li Ka-shing’s Cheung Kong group, is also looking at raising around US$1 billion for other funds and ventures in the next two years.
For the quarter ended Dec 31, ARA’s net profit rose 47 per cent from the previous year to $14.1 million. This was driven by a 48 per cent increase in revenue to $26.9 million.
The top line grew as ARA collected more management fees, acquisition and performance fees and other forms of income. For instance, the newly set up ARA Harmony Fund, which owns Suntec Singapore International Convention & Exhibition Centre, brought in management fees for the group.
ARA has proposed a final cash dividend of 2.5 cents per share and a bonus issue of up to 116.4 million new ordinary shares on the basis of one new share for every five existing shares held. Both proposals will be put to shareholders’ vote at an annual general meeting on April 26.
Taking into account an interim dividend of 2.3 cents per share, the total cash dividend for FY2009 comes up to 4.8 cents per share. The firm is confident that it can continue paying this amount to shareholders in FY2010.
‘We believe that with the continued expansion of the group, we will be able to maintain the current cash dividend per share, notwithstanding the increased number of shares post the bonus issue,’ said ARA group CEO John Lim in a press release.
Separately, Mr Lim told BT that ARA is looking to set up funds in a few areas. First, there could be a private fund focused on the aged and healthcare sector, investing in retirement homes or hospitals mainly in Japan and Australia.
ARA is also working on setting up a private fund or real estate investment trust in the hospitality sector.
In addition, it plans to raise more capital for the next franchise of the ARA Asia Dragon Fund.
For the three initiatives, ‘in the next two years, we believe we can raise another US$1 billion or so’, Mr Lim said.
There are other previously-announced plans in the pipeline. ARA recently partnered logistics firm CWT to set up Cache Logistics Trust in Singapore, and Mr Lim hopes the real estate investment trust can be listed ‘around the first quarter’.
For the full year, ARA’s net profit hit $48.3 million – a record since it was set up in 2002. This reflects a 32 per cent increase from the preceding year. Revenue rose 23 per cent to $86.3 million. As at Dec 31, ARA’s assets under management stood at $13.5 billion – up from $12.1 billion a year ago.
ARA shares rose three cents yesterday to close at $1.07.
Source: Business Times, 23 Feb 2010