30th Mar 2016 09:59
LONDON (Alliance News) - Avanti Capital PLC, the AIM-listed investment management company, on Wednesday said it swung to a first-half loss, after writing down the carrying value of its investment in cloud mobile messaging provider Mblox Inc.
In a statement, Avanti said it cut the carrying value of its investment in privately held Mblox to GBP3.1 million, equivalent to 39 pence per share, as of December 31, after adjusting for currency fluctuations, from GBP4.5 million, or 57p per share, one year earlier.
The writedown caused Avanti to swing to a loss before and after tax of GBP981,000 in the six months ended December 31, from a profit before and after tax of GBP60,000 the corresponding period one year earlier. Avanti had net assets of GBP3.3 million, equivalent to 41p per share, at the end of the first half.
Avanti said it last recognised a fair value adjustment against its investment in Mblox in 2013. "Since that time, and due to the absence of any validation events, Avanti Capital's investment in Mblox has been carried at cost (subject to adjustment for currency fluctuations)," Directors Richard Kleiner and William Crewdson said in a statement.
Kleiner and Crewdson said it "has to be acknowledged that the global economic climate has materially changed" since Avanti reported results for the financial year ended June 30 in November 2015.
Mblox expects to see growth in both revenue and earnings before interest, tax, depreciation and amortisation in 2016, due to "deployment of a new ecommerce capability for small and medium businesses, and continued growth in in its strategic account development efforts. In particular, higher growth is expected from a small number of value added resellers with global business development efforts," Kleiner and Crewdson said.
Shares in Avanti were untraded on Wednesday, having last traded at 24.50p.
By Samuel Agini; [email protected]; @samuelagini
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