Venturecorp $4.7M loss

Press, 8 March 1988, Page 25

Venturecorp $4.7M loss

PA Wellington Venturecorp Investments has reported an interim loss for the six months ended December 31, 1987 Of $4,780,000 compared with a loss of $128,000 for six months ended December 31, 1986. The pre-tax result was an operating loss of $434,000 compared with a loss of $161,000 for the previous corresponding period. There was no provision for tax against a credit of $289,000 last year, leaving the operating loss unchanged in the latest period against an after tax operating profit of $128,000 last year.

The realised loss on disposal of investments amounted to $967,000 in the latest half year, but there were no such losses last year.

Investments were written down by $3,379,000 but there was no similar provision last year, leaving the bottom line as a loss of $4,780,000 compared with a loss of $128,000 last year. The company usually takes all realised gains and losses on investments direct to a realised capital profits reserve', and all unrealised revaluations on investments are accounted for through the investment revaluation

reserve, the chairman, Mr C. G. Perrin, said. But in the latest six months the company has charged realised losses of $967,000 and unrealised losses of $3,379,000 against the profit for the period because there was no credit balance in the realised capital profits reserve and only $1,069,000 in the investment revaluation reserve. In addition a loss of $1,069,000 has been charged against the investment revaluation reserve, bringing the total reduction in the value of investments to $5,415,000 and the total reduction in net worth to $5,849,000. Shareholders' funds stood at $5,948,000 at December 31, 1987, against $12,943,000 a year earlier.

“The trading losses continue to result from the movement of funds from interest bearing securities into venture capital investments coupled with the increase in operating expenses associated with the management of a growing and active portfolio,” Mr Perrin said.

The writedown on the value of investments was mainly due to a decline in the value of the company’s investment in KiwiChina Prawn Culture Co, Ltd, a prawn farming venture on the Kaipara Harbour north of Auckland, he added.