LONDON (Alliance News) - Capital Management & Investment PLC Friday said it made a GBP3.0 million pretax profit in its last financial year, driven by a gain in the fair value of its investment in Algeco Scotsman Holdings, which was also the source of a significant boost to its cash reserves.
However, fair value gains a year earlier meant that pretax profit in the year ended January 31, 2013 was GBP13.8 million.
Administrative expenses increased to GBP744,000, from GBP348,000, mainly due to office services and foreign exchange losses on the euro. Net asset value per share increased to GBP3.76, from GBP3.46 over the course of the year. Net cash balances increased about 6.5 times to GBP7.1 million.
Capital Management & Investment has two investments, its 2.8% stake in Algeco Scotsman Holdings, and a 7% stake in Magricom. While the company made a fair value gain on Algeco Scotsman, the overall carrying value of the investment fell to GBP19.9 million, from GBP23.8 million, as a GBP3.5 million increase in its valuation was offset by a cash distribution to shareholders due to a capital reduction. Capital Management & Investment received GBP6.4 million due to the distribution.
Meanwhile, trading was difficult at Georgian mobile phone operator Magricom, in which Capital Management & Investment has an indirect 7% stake. The stake is held through a 33% holding in Yola Investments Sarl, which owns 43% of Metromedia International Group, which in trun owns 46% of Magticom.
"The board believes that the 46% shareholding that MIG holds in Magticom is worth less than the value of the loan notes to third parties, outstanding in MIG, as the value of the outstanding loan notes of CAD252 million is higher than a likely exit value based on a multiple of earnings before interest, tax, depreciation and amortisation. Consequently the board continues to show the carrying value of its shareholding in Yola... at GBPNil," Capital Management & Investment said in a statement.
Capital Management & Investment shares were Friday quoted at 223.85 pence, up 4.4%.