NAVIGATOR GLOBAL INVESTMENTS LIMITED (NGI)
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24/02/2023

1

Outperform

$1.47

31.25%

Navigator Global Investments posted earnings 6.5% ahead of Macquarie. Management has cut the top end of the FY guidance range to reflect cost increases and a delayed capital raising.

Distributions in the first half to date are aleady double that of the whole first half. Although the broker does not expect this run rate from the first two months to continue, it provides certainty for earnings growth half on half.

$110m of consideration remains outstanding in relation to the acquisition of Marble and Invictus. Navigator is proposing to fund this through retained earnings and debt, but Macquarie does not expect the group to require too much debt, as performance fees and preferred distributions are excluded.

Cost increases, the delayed capital raising, forex moves and risk from the deferred consideration lead to a target cut to $1.47 from $2.19. Outperform retained.

FORECAST
Macquarie forecasts a full year FY23 dividend of 4.59 cents and EPS of 16.15 cents.
Macquarie forecasts a full year FY24 dividend of 4.89 cents and EPS of 19.41 cents.