Listed property specialist Augusta Capital has confirmed a net loss after tax of $27.05 million after last year's $6.95m profit, saying the past year had been 'challenging'.
Augusta, chaired by Paul Duffy, said the Covid-19 pandemic had a significant impact on the business "resulting in additional strain on our balance sheet as well as the lost offeror and underwriting fees of approximately $7.5m that were planned in respect to the Augusta Property Fund offer, which was withdrawn, and the inability to launch the Augusta Tourism Fund."
Augusta raised $45m to shore up its balance sheet and its result out today is for the year to March 31, 2020.
Duffy said this evening: " While there is a rebuilding period ahead, we remain committed to serving our loyal investors and managing the portfolio through the current environment."
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The loss was generated by material unrealised fair value losses on property valuations, the loss of the Albany Lifestyle Centre deposit and sunk costs from the withdrawn Augusta Property Fund offer.
At Albany, Augusta lost its $4.53 million deposit on the Albany Lifestyle Centre which it wanted to buy for a new fund, now delayed in being launched.
Total revenue for the year fell 44 per cent to $13.2m. Yet net recurring base management fees rose by $820,000 primarily driven by the Augusta Industrial Fund.
"No fund offerings were completed during the financial year – multiple fund offerings were unable to be completed leading to a material reduction in operating earnings," the business said.
Two tourism developments were progressed during the year but now, works have now been deferred post balance date as a result of Covid-19. Those are the joint venture with Australia's 94 Feet on Queenstown's Lakeview development and a hotel management agreement with Radisson also in Queenstown.
Mark Francis, managing director said today the business had a strong retail investor following.
"With the financial flexibility provided by the recent equity raise, Augusta will be able to maximise outcomes from the assets on its balance sheet and is ready to access new opportunities as they arise. Investment property is still a fundamentally strong investment class."
Duffy said the proceeds from the equity raise were used to repay debt and Augusta had taken steps to reduce overheads and defer non-essential expenditure and cash out flows.
Augusta, which manages 71 properties worth $1.83 billion, was due to release the result some weeks ago but got a waiver to delay that until Monday next week.
It was founded by Francis in 2001 and manages office, retail and industrial properties.
But on Tuesday, Augusta chief financial officer Simon Woollams told the NZX that next Monday had now been switched to tonight.
It's not the only surprise from the Augusta camp lately: ASX-listed Centuria Capital made a takeover offer for the Viaduct-headquartered business but got cold feet when Covid-19 hit so pulled back, then suddenly said this month it was all back on again.
Augusta shares dropped from $1.19 in February to trade around .90c now.