This article is from the Australian Property Journal archive
ASX-listed securities, financial services and property investor Ariadne Australia swung to a profit in the first half, and believes it is well-positioned for sustainable long-term growth on the reduced debt and strong-performing assets.
Net operating cash inflow lifted from $1.2 million to $4.3 million.
Ariadne posted an investments net profit before tax of $3.8 million for the first half, up from $3.0 million in the prior corresponding period, which it said was derived from interest on cash reserves, share of profits and losses from investments in associates, and dividend and trading income from the trading portfolio.
During the half, the group’s investment in associates Orams Group Ltd (OGL) and Orams Residential Ltd (ORL), where Ariadne holds an indirect equity interest of 61%, contributed a loss of $1.9 million, and increase in loss from $0.6 million.
“While this represents an increase from the prior comparable period, the strategic partnership and debt reduction initiatives detailed below are expected to significantly improve financial performance moving forward,” said executive director Gary Weiss.
During the half, OGL and ORL entered into conditional agreements with Precinct Properties which involved selling a 24.9% interest in OGL’s ground lease and buildings of Orams Marine Village and a 50% interest in ORL’s adjoining residential site.
The strategic partnership “transformed” OGL’s balance sheet, reducing is debt facility from NZ$103 million to NZ$17 million while unlocking A$27.4 million in cash at the group level.
The Precinct partnership has enabled the immediate commencement of construction of two four-storey mixed-use commercial buildings within Orams Marine Village, now fully funded, while “accelerating” preliminary design and consenting works for the adjoining residential site.
“With dramatically reduced debt levels, retained ownership of the high-performing marina business, and accelerated development plans supported by our strategic partner, precinct properties, Orams is exceptionally well-positioned for sustainable long-term growth,” Weiss said.
“This is anticipated to deliver significant benefits for Ariadne in the years ahead.”
Its Coast Entertainment Holdings investment reported improved sales and attendances, with its theme park and attractions business up 35.5%. Coast has a solid debt-free balance sheet, with cash of $59.9 million as at balance date and is well-positioned for further growth.
Ariadne said Hillgrove Resources Ltd was “an investment which has promised much over the years but has consistently underperformed and been a significant drag on Ariadne’s financial results for some time”, while Clearview Wealth Ltd was “another very disappointing investment for Ariadne which has, for an extended period, traded at a substantial discount to intrinsic value”.
