Investec Australia Property Fund (Case Study Sample)

FINANCE CASE STUDY REPORT
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EXECUTIVE SUMMARY
This report aims at the evaluation of the operation and the financial performance of the various ventures so as to provide information on the best alternative for monetary investment. For the achievement of proper decision for monetary investment, this report looks at the Investec Australia Property fund and Perpetual Credit Income Trust so as to portray the various criteria that an investor or an entrepreneur can look at for proper investment in a certain venture. Additionally, for financial performance analysis, it is important to measure the life cycle stages of the different ventures, monitoring of the financial ratios, identification of the specific rate of measures as well as the liquidity ratios so as to calculate the possible risks associated with the venture. The leverage ratios, the profitability ratios and efficiency ratios are also discussed for the provision of adequate information of the lenders as well as the creditors of the entity as well as identification of the equity investors. Moreover, despite the discussion of the performance analysis as described in the report below, graphs and charts showing a graphical representation of each venture are available so as to provide adequate information to the entrepreneur. In relation to the analysis of the financial statements of the companies, the data provided relates to the previous periods of operation and performance of the entities. Hence, Investec Australia Property Fund and Perpetual Credit Income Trust discussions analysis are separate this is to ensure that the entrepreneur gains a proper understanding of both entities. Thereafter, the discussion of each company, provision of the necessary recommendations to the entrepreneur are outlined as well as the alternative measures with the ways and plans of implementation. Finally, the provision of a detailed conclusion is outlined so as to capture the key information from the finance case study report.
TABLE OF CONTENTS TOC \o "1-3" \h \z \u EXECUTIVE SUMMARY PAGEREF _Toc35892739 \h 2INTRODUCTION PAGEREF _Toc35892740 \h 5INVESTEC AUSTRALIA PROPERTY FUND PAGEREF _Toc35892741 \h 6Introduction PAGEREF _Toc35892742 \h 6Discussion PAGEREF _Toc35892743 \h 6Evaluating Operating and Financial Performance PAGEREF _Toc35892744 \h 6Using Financial Ratios PAGEREF _Toc35892745 \h 9Profitability and Efficiency Ratios PAGEREF _Toc35892746 \h 10Income Statement Measures of Profitability PAGEREF _Toc35892747 \h 11Efficiency and Return Measures PAGEREF _Toc35892748 \h 15PERPETUAL CREDIT INCOME TRUST PAGEREF _Toc35892749 \h 16Introduction PAGEREF _Toc35892750 \h 16Discussion PAGEREF _Toc35892751 \h 16Evaluating Operating and Financial Performance PAGEREF _Toc35892752 \h 16Income Statement Measures of Profitability PAGEREF _Toc35892753 \h 17Using Financial Ratios PAGEREF _Toc35892754 \h 23ALTERNATIVES AND DECISION CRITERIA PAGEREF _Toc35892755 \h 27CONCLUSION PAGEREF _Toc35892756 \h 27RECOMMENDATIONS PAGEREF _Toc35892757 \h 28IMPLEMENTATION PLAN PAGEREF _Toc35892758 \h 29APPENDIX PAGEREF _Toc35892759 \h 32
INTRODUCTION
For effective analysis of the case study report, financial analysis which involves evaluation of the business, the budgets, projects, and business transactions are essential in the determination of the performance as well as the sustainability of a company. The use of financial analysis benefits since it makes it easier in the analysis of the stability, solvency, liquidity and profitability of a company so that during decision making in relation to the monetary investment, the best alternative is selected (Adam, 2014, pp.162-177). The analysis of the financial statements of Investec Australia Property fund and Perpetual Credit Income Trust is essential in allowing for the provision of the necessary information on the operation of the entities on the previous periods as discussed below so as to provide reliable information to the entrepreneurs. It is important to note that the interpretation of the financial indicators evolutions does not result to the provision of simple data on the reviewing of the business, rather, the results of the various business should be reviewed with the adequate and proper interpretation of the results (Xu & et al., 2016, p.66). Therefore, the analysis conclusion on the monetary investment should also identify the company’s evolution based on the forecasted period and thus the entrepreneur should identify the best decisions. Thus, identification of the various life cycle stages is essential in the identification of the financial ratios to use as well as in the measuring of the financial ratios with the identification of the proper users of the financial ratios and measures (Dickinson, 2011, pp.1969-1994). Therefore, the financial analysis focuses on the evaluation of the business so as to determine the sustainability of the entity and the performance, hence, identification of the value of the investment of the business, the income statements of the company, the balance sheets or the financial statements and the cash flow statements so as to come up with the financial ratios (Justiniano & et al., 2010, pp.132-145).
INVESTEC AUSTRALIA PROPERTY FUND 
Introduction
To portray the financial case study, in this case, the Investec Australian property Fund usage shows for financial case study report in relation to the ASX (Australian Securities Exchange) newly listed companies. Investec Australia Property Fund is a real estate investment trust that is established in Australia and New Zealand. Investec Australia Property is registered under the Act of Corporation 2001 (Council, 2010). The main responsibility of Investec Property Limited is to ensure the operation and proper governance of the Fund in Australia through the investment of real estate for commercial purposes such as offices retails and industrial (Arkan, 2016, pp.13-26).
 Discussion
Evaluating Operating and Financial Performance
Financial statement analysis is the most efficient way of determining the performance firm. Financial analysis aids in the determination of the profitability levels, leverage levels and the solvency of the company. Additionally, the financial ratios are also important in ensuring proper analysis. The economic characteristic of a company shows operation evaluation and the strategies of the company. In this scenario, the Investec Australian property Fund strategic goals and the objectives include the recognition of the wealth manager as well as the bank distinctive. The distinction has been embodied to fit the entrepreneurial culture that allows for the balance by a strong risk management discipline, a client-centric approach and an ability to be nimble, flexible and innovative (Nerviana, 2016, pp.23-32). The Australian property Fund aim ensures for the building of well-defined, value-added businesses focused on serving the needs of select market niches where we can compete effectively.
Financial Objectives of Australian property Fund
 

Target in £

31-Mar-19

31-Mar-18

ROE

12% - 16% over a rolling 5-year period

12.9%

12.1%

Cost to income ratio*

< 65%

69.9%

68.3%

Adjusted EPS** growth

10% > UK RPI

3.6%

10.1%

Dividend cover range

1.7 - 3.5x

2.2x

2.2x

Capital adequacy ratio range

14% - 17%

plc: 15.7%

plc: 15.4%

 

 

Ltd: 14.9%***

Ltd: 14.5%

Tier 1 capital adequacy ratio

11%

plc: 12.6%

plc: 12.4%

 

 

Ltd: 11.2%***

Ltd: 10.8%

The fund of the Australian property has various long term strategies that lead to the building of the various diversified portfolios for the growth of the business (Liang & et al., 2016, pp.561-572).
The Investec Australia Property Fund has led to changes in the costs to the income ratios for profits and losses to other interests that are non-controlling.
Financial KPIs

2018

2019

Distribution per unit pre-WHT

10.03

10.23

Distribution per unit post-WHT

9.29

9.40

The growth of the portfolio during the year 2019, AUD 49.2mn of the acquisitions of property that led to the increase of the portfolio to a value of 1063mn, meaning since October 2013, the portfolio growth is 8.2 times more. The Investec Australia Fund seeks to ensure that the infrastructures that are key to the development of assets management.
Financial Performance Measures by Life Cycle Stage
The management of the operational performance aids in the maintenance of controls that are designed in ensuring that the risk is controlled and the portfolio performance is increased (Dickinson, 2011, pp.1969-1994). The reflection can be ident...