- October 31, 2002
- Posted by: admin
- Category: Historic Investments
Cape Town – Financial services group Mettle’s core operations did well in the half year to September, but operating revenue was knocked by the disposal of its London brokerage business as well as adjustments to accommodate new accounting standards, results showed yesterday. Stripping out these two factors, the business grew by about 30 percent, managing director Gavin O’Connor said. He indicated that Mettle was setting up a black empowerment brokerage focused on bonds and equities. Mettle would hold 49 percent of the equity, with the rest in the hands of management and other black empowerment shareholders. But it was premature to give more details. Revenue was sliced by 41 percent to R62 million in the six months, while operating income fell by 49 percent to R50 million. Headline earnings dipped 5.4 percent to R40.3 million, but headline earnings a share inched 2.8 percent higher to 7.08c. O’Connor said Mettle had started valuing its treasury trading book in line with the new accounting standards required for the next financial year, and this had resulted in a significant negative adjustment to the fair value of the book. “Due to the new illiquid markets, the company has decided to significantly reduce its exposure to the capital markets so as to reduce the volatility of its earnings going forward in light of the new accounting standards. This should result in the cash invested in the book substantially being released within the foreseeable future,” O’Connor added. He said Mettle’s core debt origination and structuring business had done well. The decision to reposition the equity team, which now focused on leveraged equity deals, had already yielded positive results. During the six months, the team had concluded three leveraged finance deals. A total of 30.7 million shares had been bought back during the six months, bringing the number bought back since the merger with financial services group Greenwich about 18 months ago to 145 million. The programme would continue in the second half. As a result of the latest buy-backs, Mettle’s empowerment shareholder, Hosken Consolidated Investments, now has a 41.2 percent stake in the company from 39.1 percent previously. On the next six months, he said Mettle would stick to its knitting, focusing on growing the core businesses. The share price ended unchanged at 54c yesterday.
Source: Business Report – Vera von Lieres