Transcription of The Stock Network Interview with Teaminvest Private Group (ASX: TIP), CEO, Andrew Coleman
Lel Smits: Team Invest Private Group is an ASX-listed investment house operating across education and advice, funds management, and direct equity ownership in medium-sized businesses. In the last half year, TIP delivered strong operating cash flow, continued disciplined investment, and materially strengthened its cash position while returning capital to shareholders. I’m joined by its CEO, Andrew Coleman, to discuss the company’s performance capital allocation and opportunities across its three operating divisions.
Andrew, welcome to the Stock Network.
Andrew Coleman: Thanks for having me.
Lel Smits: Now, TIP has just released its half-year results where you maintain shareholder returns while investing for growth. What were the highlights of these results for you? And also, how do you decide where to invest capital from this point onwards?
Andrew Coleman: Our education and advice business continued to perform strongly with 23% growth on the prior corresponding period. This did our own balance sheet, driving another 8% growth. Of course, that was offset a little bit with market returns in the period in our funds management business.
But overall, those businesses then enabled us to generate quite a lot of capital during the half. In fact, $6.6 million of cash flow, $4.1 million from operations, and $2.5 million from sale of assets. Remember, we have our passive portfolio that we turn over for a profit quite regularly, which let us, for the half, make another $4 million of new investments, which we expect will generate material growth going forward.
And of course, the way we do that is the way we’ve always done it. Very simply, we’re looking for wonderful businesses, whether they are listed on the stock exchange or private businesses, that we can acquire at a reasonable price and add material value to their management teams into the future.
Lel Smits: Excellent. And now, you also stated in your results pack that you’re looking to expand your funds management and education businesses. Why do you think now in particular is a good time to do this? And also, how are you going to use your research and investor network, which is extensive, to turn this into a growth opportunity?
Andrew Coleman: I think the answer to that really simply is volatility is our friend. I think for most people in the market, volatility is a problem.
And we’re seeing that around reporting season right now. The rise of passive funds, the rise of index tracking, and the rise of AI is really ripping the guts out of most people’s ability to pick stock market investments that do well. We’re focusing on stocks here, but it probably applies to all asset classes.
And so, our research-driven approach honed over the last 25 years really is giving us an edge in this market as much as in any previous one. But I think to your point about why is now such a wonderful time to invest, I think our moats are really coming to the fore right now, and it’s becoming more and more clear to our industry peers, just where we can add value to them as a business owner, as well as to our clients. And so, that creates a wonderful investment opportunity for us to snap up stakes in these wonderful businesses at distressed prices.
Lel Smits: Yes. And from a longer-term perspective, you’re continuing to invest, as you mentioned, in high-quality cash-generative businesses with strong leadership teams, also those enduring moats. But how does this approach build value creation across your portfolio? And also, in the year ahead, how are you going to be building upon it?
Andrew Coleman: It’s no surprise that cash-generative businesses give you a lot more cash to invest in new things. And really, as shareholders, all we’re looking for, whether that’s a shareholder as a company or shareholders on the ASX, of course, is an ever-increasing dividend stream with rising capital growth. And those conditions can only be met if you own wonderful businesses that have strong cash flows. As that old saying goes, revenue is vanity, profit is sanity, and cash flow is reality.
Lel Smits: It’s a great quote, and thank you for leaving it there, and all the best in the year ahead.
Andrew Coleman: See you again.
Ends