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Navra Financial Services in liquidation?

Discussion in 'General Investing Discussion' started by perky, 19th Jul, 2011.

  1. perky

    perky Well-Known Member

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    Hi all,
    My dad just got a letter to shareholders saying that one arm of the Navra business has been put into liquidation - Navra Invest? Sound like FUM had dropped to only 53 mill .
    Can anyone shed any further light on this please?
    David
     
    Last edited by a moderator: 19th Jul, 2011
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    No - it is the financial planning arm, Navra Financial Services which has been placed in liquidation. The funds management company NavraInvest continues to operate.

    I've changed the title of the thread to prevent mis-information.

    Essentially, although NFS started off as a profitable investment for NavraInvest, recent events (especially the collapse of Great Southern and the subsequent actions) - have lead to an inability to secure insurance on an ongoing basis at a reasonable cost. In other words - the insurers have practically forced them out of business by pricing their risk extremely high. Not that surprising I guess, given the exposure the insurer now faces with the fallout from the GS collapse.
     
  3. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Further to this:

    • Steve will no longer be practising as a Financial Planner and will focus full time on NavraInvest (and in particular, the property fund)
    • The Structured Property Fund will be re-engineered into a pure property fund by removing the commitment to investment a portion of the fund into an equity share portfolio
    • Steve will be back doing the education workshops that he loves doing
    • They are investigating a new capital protected fund tied to the ASX50 index.
    • There will be an information meeting soon
     
  4. perky

    perky Well-Known Member

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    Thanks for the clarification Simon.
    I wish I could make it over to Chatswood and have a chat tomorrow evening but have to work till 630pm. Shame we are not going to Bull n Bush!

    So it sounds like - as a shareholder - there is still some hope left that our shares in the actual Navra company will eventually come back?
    David
     
  5. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Last I heard they were still planning to list on the NSX at some point soon.

    Steve is still there plugging away at the funds management side of things.
     
  6. hiflo

    hiflo Well-Known Member

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    Sim

    Do you know what will happen to the Share of NFS?

    Are they going to be worth zero?
     
  7. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    hiflo - there are two separate companies involved here:

    A. NavraInvest (NI), which is a funds management company, owned by a number of shareholders

    B. Navra Financial Services (NFS), which was a financial planning company, owned 50% by NavraInvest and 50% by Steve Navra and Mark Raymond.

    It is NFS which has gone into liquidation.

    NavraInvest continues to operate, the shares people hold in NavraInvest are (arguably) still worth something - assuming the company can continue to be profitable and pay dividends.

    In the short term, the value of NavraInvest's investment in NFS has been written off, leading to a capital-loss for the financial year. What impact this will have on the value of the shares in NavraInvest is difficult to tell - especially since it is arguable how much they were worth in the first place. Mostly, the write-off of the NFS investment is just an accounting adjustment and (in theory) shouldn't affect the value of the NI shares much (other than a consideration of how much positive cashflow the shareholding generated for NI - if any!).

    If NavraInvest can continue to generate positive cashflow and pay dividends without NFS, then the share price of the company will continue to be nominally somewhat above zero.
     
  8. Nigel Ward

    Nigel Ward Team InvestEd

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    No doubt I'll be attacked for sounding like a "smug" I told you so but...the use of $1.6m of NI shareholders' money to buy half a financial planning practice from related parties was always a very questionable idea.

    It delivered a very nice payday for Steve and Mark and no value for NI shareholders.

    Given the number of votes cast at the meeting where it was approved though, it seems I was almost the only person who thought so. But hey - that's life when you don't control the company through your extended entourage.

    No doubt people will point to the 2010 contribution to NI profit made by NFS, but I find it curious that the figure mentioned in the NI letter is NFS' pre-tax 100% profit. Not the post tax 50% share which NI was entitled to receive.

    No doubt people will say you can't predict the future, but blind freddy could see this was a dumb deal for NI given that much of NFS revenue came from commission on tax driven agri schemes which themselves were highly questionable investments.

    There was a reason the promoters of the agri schemes would pay up to 10% commission or more to financial planners who sold them to their clients compared to more typical 1-2% commission figures for more standard investment products.
     
  9. hiflo

    hiflo Well-Known Member

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    Thanks for the clarification, Sim.
     
  10. GeeVee

    GeeVee New Member

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    While it is still on topic, can I ask about the demise of the Great Southern Group and as well, the letter mentions claims made against NFS and some of it's advisers? What is/was involved there?