(MENAFN- Arab Times) Global Investment House (Global) held today a press conference entitled "Global and the future," attended by Maha Al-Ghunaim, Vice Chairman & Group CEO and Bader AL-Sumait, Chief Executive Officer and discussed the company's performance and strategy as well as its future plans.
Al-Ghunaim said, "The crisis is behind us" and growth opportunities are ahead," pointing to the most important elements of growth which the company enjoys such as the strong financial position, high liquidity and cash flows, experienced human capital and quality of revenues. Global is today debt-free with shareholders' equity of KWD87.3 million and 55% of its assets is in a form of cash and cash equivalent. The company also has expertise in the field of asset management, investment banking and brokerage and continuously develops the human capital through specialized training courses in addition to the possession of a number of managers and staff certified in their field of work.
In 2014, the company reported its best performance since 2009, despite the geopolitical unrest in the region and the large drop in the GCC financial markets as a result of the sharp drop in crude oil prices in the second half of 2014.
During the past two years, the company achieved a significant increase in net profit and revenue as a result of the growth of its core business through the implementation of a growth strategy focusing on clients and at the same time reducing risk. Net profit stood at KWD 6.5 million in 2014 compared to KWD 1.9 million in 2013.
The company's shareholders have approved in the Annual General Meeting held on Thursday, May 28, 2015 a cash dividend of 5 per cent for the financial year ended December 31, 2014 with a the total amount of KWD 3.9 million ($12.9 million). Effective Wednesday, June 3, 2015, shareholders can receive their dividend from Kuwait Clearing Company.
Total revenue also grew during 2013 and 2014 by 18% and 72% respectively to reach KWD 22.5 million in 2014. What distinguishes Global's earnings during the year 2014 is the quality of its revenues generated by the fee based core businesses which represent 67% of the revenues.
In addition, the fee-generating core businesses of asset management, investment banking and brokerage, witnessed continuous growth since the year 2012. Fees and commission have grown by 20% in 2013 and 29% in 2014 to reach KWD 14.9 million, which reaffirms that the company is on the path of sustainable growth.
During 2014, the Asset Management business remained resilient with KWD 1.2 billion ($4.1 billion) of assets under management. Several funds managed by Global outperformed their respective indices and peers and received industry accolades. Despite significant adverse equity markets movements in the GCC and MENA region during the last quarter of 2014, some of the Company's flagship funds crossed the high watermark thresh-holds for incentive fee (carry). This segment contributed KWD12 million to revenues, a 27% increase compared to 2013.
On the brokerage front, Global brokerage made focused efforts to grow the institutional brokerage business and consequently the research unit was integrated with the brokerage. These efforts contributed to market share gains particularly in Kuwait market. This segment contributed KWD 2 million to revenue, an 11% increase compared to 2013.
During 2014, the Company's Investment Banking team signed several mandates with regional companies to provide them with financial advisory services, successfully concluded an M&A transaction for a Kuwaiti company in the financial sector and advised an industrial company in Kuwait on its KWD130 million ($443 million) debt restructuring. This segment contributed KWD 1.2 million to revenue, a 171% increase compared to 2013.
Global has the highest market share of fees & commission
The financial statements of Global and the competition (Investment companies listed on Kuwait Stock Exchange) show that Global enjoys the highest market share from fees and commissions, which is the backbone of the company's business model.
Corporate Governance
Global views the implementation of Corporate Governance practices as integral to its operations. Global is committed to the principles of international best practices of governance and at all times strives to comply with such practices. The Corporate Governance framework at Global is based on an effective Board and the constitution of Board Committees to oversee critical governance areas of the company. The company is in the process of full compliance with the decision of the capital markets on corporate governance before June 30, 2016.
Future Plans & Strategy
The company's strategy is to focus on developing products and services in asset management, investment banking and brokerage with the aims to become the preferred investment bank in the region.
Future plans for growing the core business include supporting the regional network to increase their contribution to the company's total revenue and increased assets under management by attracting institutional and high net worth individuals to invest in existing products and introduce new products such as real estate and fixed income funds and to expand its asset management services such as portfolio management, advisory services, cash management and special situations asset management.
We will also increase our market share in brokerage through the implementation of growth plans capitalizing on access to multiple markets and Global's pool of asset management client base. In Investment Banking, the focus will be to provide financial advisory services for mergers and acquisitions and restructuring transactions benefiting from our regional presence.
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