Equiticorp starts well

Press, 1 November 1984, Page 26

Equiticorp starts well

Equiticorp Holdings, Ltd, earned a maiden unaudited group net profit of $1,224,000 in the six months to September 30, the company announced yesterday.

The chairman, Mr A. R. Hawkins, says in a halfyearly report that the group is trading above its prospectus projections. Equiticorp was launched as a finance company early in March and was listed on the stock exchange in June. The prospectus listed the projected net profit for the year to March 31, 1985, at $1,980,000.

“The development of a substantial earning asset base and a rapidly increasing profit flow in such a short period of time and in the face of the economic changes that took place is early confirmation of the group’s potential,” Mr Hawkins says.

A business base has been built with the support of shareholders, investors, clients, friends, and fellow institutions, together with the effort of the staff and Although competition is tougher, the freedom in decision making has allowed operators to make a more managed and balanced pattern of borrowing. In addition, the changes have reinstated the importance of the careful management in interest rate margins, he says,

On individual sectors, Mr Hawkins says that commercial finance, which concentrates on loans of more than $50,000, has achieved a steady lending portfolio of $33 million at September 30. The corporate finance activities in advisory services, including underwriting and guarantees, has extended its commitment to S27M (including contingencies).

The Australian staff have been set up in the financial centre of Sydney, and are involved in fee-based and investment services. But, it is hoped that the Australian Government’s intention to management. Although the details of the Budget are not yet known, the economic outlook would seem to be for tight if not contradictory conditions.

"However, Equiticorp has been set up as a lean organisation with comparatively low overheads, and given a continuation of the present profitability, a first year dividend will be declared before March 31,” he says. The directors also expect that the profit for the year will be higher than that forecast in the prospectus. During the initial period of trading, the group was strictly controlled oy a patchwork of Government rules and regulations, but this was followed by the July to September quarter, which included a snap election, banking deregulation, removal of interest rate controls, and devaluation.

Not surprisingly, the big changes caused considerable pressure on the financial sector.

rationalise merchant bank shareholdings will allow the group to extend into areas that are at present restricted. International banking services have also been established in Hong Kong and the Netherlands. Investment banking has expanded rapidly, including the largest — a 35 per cent shareholding in much bigger Jedi Corporation, Ltd, previously Teltherm Industries, Ltd, which was restructured.

Income totalled $5,145,000, and after expenses of $4,493,000, a pre-tax profit of $652,000 was left.

Deferred tax amounted to $lOOO.

Shareholders’ funds increased $15,576,000 to $35,576,000, including ordinary capital up S6M to S2OM. Borrowings, deposits, and acceptances grew from $1,798,000 to $104,828,000, and receivables, securities, and acceptances rose from $21,604,000 to $140,293,000. A provision for contingencies of $500,000 has also been created. No account of investment revaluations has been taken. Total assets rose from $22,227,000 to $142,630,000.