Cannae(CNNE) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Cannae's total operating revenue for Q4 2024 was $110 million, an 8$1.9 billion, equating to $29.78 per share on an after-tax basis, while Cannae shares closed at$19.19, reflecting a 36% discount to NAV [29] Business Line Data and Key Metrics Changes - Dun and Bradstreet (DNB) reported Q4 2024 revenue of $632 million, showing less than 1$260 million, down slightly from the previous year [17] - Alight posted total revenue from continuing operations of $680 million for Q4 2024, a 0.3$217 million [19] - AFC Bournemouth's revenues increased nearly GBP 20 million or 14% in fiscal year 2024, with expectations for further growth in 2025 [10] Market Data and Key Metrics Changes - The restaurant operating expenses in Q4 2024 were $170 million, accounting for 81$12.5 million gain from an early exit from the restaurant support center, offset by losses from the sale of shares in Alight and Paysafe [26] Company Strategy and Development Direction - The company aims to increase NAV and narrow the discount to intrinsic value through improving portfolio company performance, making new investments, and returning capital to shareholders [7] - Cannae plans to prioritize share buybacks and use proceeds from public company sales to pay down debt and invest in new and existing portfolio companies [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the portfolio's ability to drive future value creation and grow NAV, highlighting new private investments expected to generate high returns [11] - The management team is focused on generating cash flow to cover dividends and operating expenses, indicating that they are still working towards this goal [42] Other Important Information - The company internalized its external manager and brought back Bill Foley as CEO, aligning management compensation with shareholder interests [15] - Cannae has over $108 million in corporate cash and short-term investments, with$101 million on margin loans and $60 million of net debt at a weighted average of 7.35% [28] Q&A Session Summary Question: Impact of Bournemouth's performance on financials - Management noted that Bournemouth's performance could have a significant financial impact, including additional media dollars and match day revenues from European competitions [36] Question: Dividend funding through cash flow - Management indicated they are still a ways away from fully covering the dividend through cash flow but are focused on generating cash from investments [42] Question: Appetite for share buybacks - Management confirmed that share buybacks are a priority, contingent on the stock price and potential monetization events from public company investments [46] Question: Capital funding for Black Knight Football - Management discussed the capital funding needs for AFC Bournemouth, including player transfers and infrastructure investments [55] Question: Alight's management changes - Management clarified that Bill Foley stepped down as Chairman but remains involved, and they believe the new board will add value to Alight's long-term strategy [58] Question: JANA partnership activity - Management stated that discussions with JANA Partners are very active, with specific targets being discussed that could be beneficial for Cannae [65]