Blue Sky Alternative Investments reveals $24.7 million hit to underlying net profit

EMBATTLED Brisbane funds manager Blue Sky Alternative Investments takes another profit hit and confirms it will not pay a dividend after a tough year.

Blue Sky Alternative Investment shares have taken a massive hit since March.

EMBATTLED Brisbane funds manager Blue Sky Alternative Investments has revealed a $24.7 million hit to its aggregate underlying net profit.

Blue Sky also announced that it will not pay a dividend to investors after a tough year which saw its share price nosedive more than 80 per cent.

The company released the third and final part of a review of its assets yesterday, following a harsh critique in March by US-based short seller Glaucus Research.

Glaucus alleged that Blue Sky inflated its asset values, misrepresented its performance and overcharged clients.

Blue Sky said it had reviewed the valuations of its 89 managed assets and the results of one additional asset will be released next month. The underlying net profit impact from the review will result in a further $2.2 million loss, the company said. Blue Sky said it had $40 million in cash and no debt at the end of June, which was a slight improvement on its $32.3 million forecast last month.

Fee-earning assets under management remained unchanged at $3.4 billion.

Blue Sky plans to release audited full-year results next month.

Shares in Blue Sky, which were trading at $11.43 before the Glaucus report in March, were up 1.5¢ to close at $1.42 on Friday.

One Brisbane analyst, who did not want to be named, said the update had not changed much from Blue Sky’s announcement last month but he criticised the language as needlessly opaque and “difficult to fathom’’.

He said the audited full-year results next month will paint a much clearer picture of the company’s health.

In particular, he’s keen to see Blue Sky’s cash flow statement, contingent liabilities, related party transactions and remuneration for top executives. Some of these details may not be disclosed until the release of the annual report later in the year.