3rd Dec 2015 11:16
LONDON (Alliance News) - City Of London Group PLC on Thursday said it swung to a first-half pretax profit, having sold its litigation fund management business at a profit in April and subsequently raised GBP5.0 million in a placing and transferred its listing to the London Stock Exchange's junior market from the main exchange.
Profit amounted to GBP840,000 in the six months ended September 30, compared with the GBP796,000 loss in the corresponding half the prior year, as revenue rose to GBP1.13 million versus GBP819,000 from continuing operations and GBP260,000 from those discontinued. Underlying losses, which do not take into account the GBP1.4 million profit on the disposal of Therium among other costs, halved to about GBP400,000.
Chief Executive John Kent said the sale of Therium Capital Management, which means City Of London Group is now a business focused on lending to smaller businesses, and the move to AIM gave the company a "robust" foundation.
"We will now spend the next 18 months helping our platforms to build scale. This will not be without challenges and risks, particularly in the second half, as we seek to renew Trade Finance Partners Ltd's sales growth and sources of financing and further extend Credit Asset Management Ltd's loan book," Kent said.
A provider of trade finance to smaller businesses, Trade Finance Partners, has "relatively subdued" sales growth in the first half, following a "major leap" forward in the prior six-month period. The subsidiary has begun funding talks with alternative partners, after Macquarie Bank said it would prefer Trade Finance Partners to refinance an existing GBP30.5 million borrowing facility provided by the Australian lender.
City of London Group has drawn down in the range of GBP20.0 million and GBP25.0 million on the facility.
"After subdued growth in the first half, TFPL's management are now in a position to anticipate significant new business. The changeover in funder will provide an opportunity to obtain new finance at lower rates, although it will be important to procure a seamless transition to avoid any drag on revenue," Kent said.
City Of London Group said it has been keeping a close eye on costs at Credit Asset Management, which provides asset-backed finance to smaller businesses. The subsidiary's revenue grew to GBP757,000 in the half, versus GBP477,000 in the prior year period.
Shares in City Of London Group were untraded on Thursday morning at 28.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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