by Paul McBeth
The company made a net profit of $5.5 million in the 12 months ended August 31, down from $8.2 million a year earlier as declining revenues took their toll. Total revenue fell 26% to $20.7 million.
Chief executive Richard James said they have tried to offset the falling income by "very aggressively" cutting back costs and not replacing staff as they depart.
"We had about 105 people at the peak, probably in the middle of 2007, now we're closer to 80," James told Good Returns. "The principals have foregone their contingent income for the past two years."
James said they had kept a lot of cash on hand to keep debt from becoming an issue, and to take advantage of any opportunities that arise, though he said none were in the pipeline. The firm had some $11.3 million in cash or in short-term deposits as at August 31, compared to $10.6 million a year earlier.
Not all was rosy for the fund manager, with auditor Ernst & Young highlighting a "fundamental uncertainty" over the Private Loan Trust, formerly known as the Private Fidelity Trust. The recoverability of about $10 million loaned to Martyn Reesby's Fidelity Ltd.
James said Fidelity had "met all of their commitments," and while the exposure to investors was minimal it will be a long wait to recover the loan as the property market takes a long time to bounce back from its decline over the past two years.
While James is mildly upbeat about his business' prospects this year; as an investor he is a little more pessimistic, saying much of the rebound in the economy has come from stimulus designed to treat the symptoms rather than the cause.
Paul is a staff writer for Good Returns based in Wellington.
| « [Weeky Wrap] Back to school for advisers | Sovereign takes regulation bull by the horns » |
Special Offers
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved