Attempts to avoid the proposed tax on the earnings of super balances above $3 million or land taxes could leave self-funded retirees exposed to back-dated claims and ATO audits.
A weakness of the super sector is the number of funds that take DIY literally and shun professional input. But this might be changing as a growing number of new funds reach out for a helping hand.
Higher dividend the tasty cherry on the Qualitas cake
Shareholders felt the love from the alternative real estate investment manager Qualitas (ASX:QAL) in the year to June 30, 2024, with a final payout of 5.75 cents a share taking the annual dividend to eight cents – a seven per increase compared with 2023.
In a financial year when many companies cut their dividends, Qualitas went against the flow, using a 17 per cent increase in after-tax profit to $26.2 million to reward shareholders. And investors returned the compliment with the stock enjoying a solid rise since August, closing at $2.67 yesterday (see graph below).
Aside from the higher payout and earnings increase, other significant milestones were a strong growth in funds under management, reaching $8.9 billion for a 46 per cent increase compared with 2023, and a record $4.2 billion in capital deployment – primarily property private credit – up 40 per cent compared with 2023.
Normalised EBITDA increased 25 per cent to $41.9 million, with funds management EBITDA growing 43 per cent year-over-year to $37.9 million.
Andrew Schwartz, group managing director and co-founder, attributed the strong performance to the company’s diversified investment strategies and ability to raise scalable capital.
“Our strategic focus remains on three key areas of growth: growing top-line funds management revenue, improving scalability through larger investments and mandates and the strategic use of balance sheet capital to aid our platform and earnings growth, which collectively, contributed to 2024 being a milestone year.”
The company reported robust funds management revenue growth of 22 per cent, with the EBITDA margin expanding to five per cent, exceeding the long-term target set at its 2023 investor day.
Qualitas emphasised its focus on private credit, with 78 per cent of invested funds allocated to first mortgage senior debt and 77 per cent of funds in the residential sector. The balance sheet remains solid with $194 million in cash reserves, and a strategic co-investment of $110 million deployed, highlighting its growth ambitions.
The residential sector’s imbalance between supply and demand continues to create investment opportunities, with Schwartz highlighting that Qualitas was well-positioned to capitalise on lending opportunities as interest rates stabilise.
Independent chair Andrew Fairley (pictured) said growth had always been underpinned by an unwavering focus on risk, strong corporate governance and intensive financial oversight.
“We have an enviable track record having invested in assets across various real estate sectors, with a combined value of more than $27 billion. Our growth continues to be underpinned by significant investor demand for private credit, particularly from overseas institutional investors.
“This was most recently manifested by the $550 million mandate from a North American-based global institutional investor. It highlights our ongoing ability to attract capital through a challenging capital raising environment.”
With solid foundations and an optimistic commercial outlook, Qualitas is poised for further growth in the 2025 financial year, with the focus on scaling its funds management platform and deploying capital efficiently across key sectors.
