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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% decrease compared to Q4 2023, primarily due to lower restaurant revenue [14] - The aggregate decrease in restaurant revenue reflects store closures and general headwinds in the casual dining sector [14] - Cannae recognized a net asset value of approximately $1.9 billion, equating to $29.78 per share on an after-tax basis, with shares closing at $19.19, representing a 36% discount to NAV [17] Business Line Data and Key Metrics Changes - Dun and Bradstreet reported revenue of $632 million for Q4 2024, with less than 1% constant currency organic growth compared to the prior year [10] - Alight posted total revenue from continuing operations of $680 million for Q4 2024, a 0.3% decrease from Q4 2023, while adjusted EBITDA increased by 5% to $217 million [11] - AFC Bournemouth's revenues increased nearly $1 million or 14% in fiscal year 2024 and are expected to increase again in 2025 [5][6] Market Data and Key Metrics Changes - AFC Bournemouth is currently in sixth place in the Premier League, its highest ranking ever, and has achieved the longest unbeaten streak in club history [6] - DNB achieved 3% organic revenue growth for the full year 2024, with adjusted EBITDA expanding to $927 million, up from $569 million at the time of Cannae's take-private [10] Company Strategy and Development Direction - Cannae's long-term strategic plan aims to increase net asset value (NAV) and narrow the discount to intrinsic value by improving portfolio company performance, making new investments, and returning capital to shareholders [5] - The company plans to prioritize share buybacks and use proceeds from public company share sales to pay down debt and invest in new and existing portfolio companies [9] 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, particularly through new private investments [6][7] - The management team is focused on generating cash flow to cover dividends and operating expenses, indicating that they are still working towards this goal [25] Other Important Information - Cannae repurchased 9.7 million shares in a Dutch auction, returning approximately $222 million to shareholders, and instituted a quarterly dividend that returned an additional $23 million in 2024 [8] - The company internalized its external manager and brought Bill Foley back as CEO, aligning management compensation with shareholder interests [9] 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 revenues and match day revenues from European competitions [22][23] Question: Funding for dividends and capital allocation - Management indicated that they are still working towards generating sufficient cash flow to cover dividends and operating expenses, with a focus on capital allocation [25][26] Question: Capital funding for Black Knight Football - Management discussed the capital funding needs for AFC Bournemouth, emphasizing the importance of player sales and ongoing commercial revenues [36] Question: Alight's management changes and strategic positioning - Management clarified that Bill Foley stepped down from the Chairman role at Alight but remains involved, and they believe the company is well-positioned for future success [41][42] Question: Activity level in the Jana Partners partnership - Management confirmed that discussions with Jana Partners are very active, with specific targets being discussed that could be beneficial for Cannae [45][46] Question: Capital needs for AFC Bournemouth - Management mentioned potential capital needs related to player transfers and infrastructure, including stadium redevelopment [48][52]