Australasian Review: The funds are happily hopping along

Monday 9 October, 2017

Australasian Review: The funds are happily hopping along

Written by Mike Ross, Investment Analyst

September was a positive month for most of the Australasian funds, with Growth 2 the strongest performer, up 1.8%. Some key contributors during the month included EML Payments, Gentrack and Kip McGrath. The Australasian investment team visited Sydney following the reporting season. We met with a number of existing holdings and new companies, some of which we have since added to the portfolios. 

Leaders of the pack 

EML announced it had struck two agreements with European gaming and betting operators during the month to provide branded reloadable cards. The first of these was with Fortuna Entertainment Group, the largest betting company in Central Europe, while the second was with Betsson Group, an operator of more than 20 i-gaming brands. Gentrack upgraded its earnings guidance from $20 million underlying EBITDA to $24 million at the end of September, confirming our view that previous guidance was conservative. The key contributor to the Emerging Companies fund was Kip McGrath Education, finishing the month up 35%. Trilogy was a key detractor - we have been reducing our position in the company.

New recruit 

One recent addition to the portfolio, Eclipx Group, provided a positive trading update at its investor day in September, confirming it was tracking to the top end of its previous guidance range and upgrading guidance to include a contribution from the recently acquired Grays business. Eclipx’s core business is in corporate fleet management and financing. The company is leveraging its core capabilities and buying power to grow and diversify the business into synergistic areas within the consumer and commercial equipment finance segments. Eclipx has a high-quality, aligned management team with significant skin in the game and a strong track record. The company has a high proportion of recurring revenues and earnings visibility. We believe the scrip acquisition of Grays created an attractive entry point into the stock.

Past performance is not an indicator for future performance. This is not intended to be financial advice and does not take into account any particular person’s circumstances. Before relying on this information, please speak to an independent financial adviser.