An employee share plan has cost HFA a maiden profit as a listed entity with the absolute return manager revealing an almost $11 million loss in its first annual report since joining the ASX in April.

However, Brett Howard, HFA chair, said in the report that the loss of $10.8 million was only slightly more than the projected shortfall of $10.5 million with its underlying net profit of $7.9 million falling $1 million short of the prospectus forecast. “The one-off cost of $19 million for the employee share offer resulted in a net loss after tax of $10.8 million… The result was achieved on total revenue of $35.5 million,” Howard said. HFA’s underlying profit was also affected by an increase in the investment management fees it pays to its US hedge fund partner Lighthouse following a renegotiation of the terms in May. According to the original HFA prospectus projections, Lighthouse was to receive 40 per cent of management fees leading to a forecast of $16.3 million that would have been paid to the US manager. Following the May increase, Lighthouse actually received $17 million in fees from HFA over the year. Of the $35.5 million revenue, over $21 million was garnered from asset management fees and almost $13.5 million in performance fees. As at June 30 this year HFA reported total funds under management at $1.56 billion – an increase of 113 per cent on the previous year. HFA will pay a 1.5 cent dividend on October 31. The HFA share price was at $1.78 at the close of trade yesterday – down 2 cents for the day.

Leave a comment