Cannae Holdings, Inc. ((CNNE)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Cannae Holdings, Inc. recently held its earnings call, revealing a mixed sentiment. The company showcased strong progress in executing its strategic plan, highlighted by successful portfolio rebalancing and significant shareholder returns. However, challenges were noted with declining revenues in its largest public investment, Alight, and an overall operating revenue decline.
Successful Portfolio Rebalancing
Cannae Holdings successfully reduced its public investment portfolio from 70% to 20%, generating $630 million from the sale of Dun & Bradstreet to Clearlake Capital. This strategic move aligns with the company’s focus on proprietary private investments, marking a significant step in its rebalancing efforts.
Significant Shareholder Returns
Since the announcement of their strategic plan, Cannae has returned over $500 million to shareholders. This substantial return represents 35% of the shares outstanding at the time of the plan’s announcement, underscoring the company’s commitment to delivering value to its shareholders.
AFC Bournemouth Growth
AFC Bournemouth, one of Cannae’s investments, achieved double-digit revenue growth and is undergoing stadium expansion. This expansion is expected to increase capacity and revenue potential, reflecting the company’s strategic focus on enhancing its sports-related assets.
Black Knight Football Performance
Black Knight Football reported successful player trading profits and strong on-field performance. The club has also established significant player development connections between FC Lorient and AFC Bournemouth, contributing to its overall success.
Decline in Alight’s Revenue
Alight, Cannae’s largest public investment, reported a 4% decline in total revenue year over year. This decline has led to lowered forecasts for revenue, adjusted EBITDA, and free cash flow, presenting a challenge for the company.
Decreased Operating Revenue
Cannae’s operating revenue decreased by $7 million from the previous year, attributed to reduced guest counts and fewer restaurant locations. This decline highlights the challenges faced in maintaining operational revenue streams.
Equity Losses of Unconsolidated Affiliates
The company reported equity losses of $57 million, a significant increase from the previous year’s $25 million. These losses were driven by Alight’s goodwill impairment, impacting Cannae’s financial performance.
Forward-Looking Guidance
In its forward-looking guidance, Cannae Holdings emphasized its strategic plan execution and financial metrics. The company closed the acquisition of Dun & Bradstreet, reallocating capital towards proprietary private investments. Investments in JANA Partners and Black Knight Football were highlighted, along with ongoing stadium renovations at AFC Bournemouth. Despite challenges, the company remains committed to returning capital, with significant stock repurchases and future dividends planned.
In summary, Cannae Holdings, Inc.’s earnings call reflected a mixed sentiment with notable achievements in strategic execution and shareholder returns. However, challenges such as declining revenues in key investments and increased equity losses were also evident. The company’s forward-looking guidance suggests a continued focus on optimizing its portfolio and enhancing shareholder value.