Ann: Market Update, page-6

Hi Galba

The Funds management operations have now reached a level where they are profitable, cash flow positive, and the operating leverage is starting to kick in. Cash flows are going to start increasing rapidly from here (assuming FUM does not decline!). They also have $5m surplus cash which they could distribute.

In H1 they paid out all their earnings as dividends (2.5c).
They have guided for $3.5m pre tax for the FY14, or $2.6m post tax (assuming the H1 tax rate of 26%) or about 2.8cps for H2, which they should pay out as a minimum.

The other interesting bit of upside here is now Jasco. Jasco is now debt free, and owns $17m of property, which almost supports CIW’s $8m investment by itself.
Now that Jasco is debt free, and is saving on paying rent (by owning its own properties), it should be generating decent amounts of FCF to pay to CIW and the other shareholders as dividends.

Don’t have any specific targets as such – but I would expect to see it re-rate over the next few months (assuming FUM levels hold up)