Treasury Group (TRG)

By Jason Fittler

This is a company I am keeping an eye on.

At this stage I do not consider it investment grade however if we start to see a turnaround in investors attitudes to growth it would be one to be in.

TRG is an Australian investment and funds management company. Treasury Group Investment Services (100%) acts as product issuer and responsible entity for a range of registered managed investment schemes.

The Company currently comprises eight boutique fund management businesses. Investors Mutual Limited (47.5%), Orion Asset Management (41.9%), AR Capital Management (30%), Celeste Funds Management (39.1%), Global Value Investors (48.7%), Treasury Asia Asset Management (40%), Rare Infrastructure (40%) and Aubrey Capital Management (20%).

The company has seen a 7% fall in Net Profit After tax in the first half 2012, this is due to a fall in the profits of the managed funds industry.

As investors are currently looking toward cash in this uncertain environment the fund management industry will continue to struggle.

On the positive side TRG has maintained its dividend at 34c per share fully franked giving it a gross yield of 11% and forecasts that this will grow slightly in 2013 to 35c per share.

We are also expecting a 15% increase in earnings per share in 2012 and a further 8% increase in earnings per share in 2013.

The company has no debt at present and all dividends are paid from cash, the current payout ratio is 63%. They have a strong cash position of $10 million.

At present the industry carries a little too much risk to call a buy on the stock but certainly one to watch. 

For more information on Treasury Group (TRG) please contact us on 07 4771 4577. 

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