Hamelyn extends bottom-line loss

Press, 4 April 1989, Page 38

Hamelyn extends bottom-line loss

PA Wellington Investment bank and broker Hamelyn UPC had a $1,433,609 loss in the year ended last November 30, after a $20,022 profit in its maiden nine months to November, 1987. The loss was increased by extraordinary items, including a $2,977,865 write-off of goodwill in respect of Hamelyn’s purchase of United Pacific Corp. The bottom-line, audited loss of $4,672,614 was, however, under the previous period. Extraordinary deductions of $6,713,000 gave the company a loss then of $6,691,779. Extraordinaries in 1987-88 also included losses on investments totalling $323,210. These were partly offset by a $108,778 write-back of an associate company advance written down in 1987 and a write-off of $46,708 of fixed assets as a result of the merger of the UPC and Hamelyn offices.

Hamelyn had revenue in the year of $4,649,548 ($3,510,375 in the previous nine months), comprising fees and brokerage of $2,652,164 ($2,612,975) and investment income of $1,997,384 ($897,400). Outgoings totalled $6,195,728 ($3,056,989) including interest of $1,762,106 ($763,151). The Sydney-based associate companies, Capital Market Brokers Pty and Stafford Financial, contributed a net profit of $28,610 ($84,032 loss from all associates). A tax credit of $83,931 has been recognised in the 1988 result ($341,076 tax expense). No dividend was recommended by the directors. They said that of the group’s fully-owned operating subsidiaries, only the lending and deposit taking subsidiary, United Pacific Merchant Securities, contributed a profit to the result. This subsidiary had continued to trade profitably since November 30.

The directors said the business environment for companies operating in the financial services sector was particularly severe throughout 1988.

Hamelyn UPC was adversely affected by the environment despite the completion of a satisfactory level of mandates and actions taken to dispose of investment assets, repay borrowing, reduce personnel numbers, and relocate UPC personnel into the Hamelyn premises, the directors said.

Many of the company’s clients experienced difficulties during the period and some fee income recognised in the company’s half year result to last May 31 was subsequently written off.

Directors expected to hold a shareholders’ meeting later this month to seek approval for the sale of United Pacific and its subsidiaries, which was Hamelyn’s main business, to M. J. Reid. Hamelyn was listed on the Stock Exchange in April, 1987.