'Difficult market' hits Strathmore

By PETER GRIFFIN and NZPA

Shareholders of technology investment company Strathmore Group started their Easter break with news that the company had posted a half-year profit of $4.82 million.

The result compared with a profit of $1.38 million for the same period a year ago.

Strathmore executive chairman Phil Norman said most of the profit was through realisation of its investment in listed communications software developer Commsoft and company directors recommended no dividend be paid.

Market volatility in the technology sector was likely to continue for the remainder of the year, which would affect Strathmore's share price, Mr Norman added.

"Strathmore and its portfolio are not insulated from the difficult market conditions for technology stocks, which are particularly severe in the US at the moment."

The report suggested a tight liquidity position, with current assets of $752,000 outgunned by current liabilities of $862,000, but Strathmore's chief financial officer Peter Saunders said that in practice the company had plenty of short-term cash.

"All of the investments are listed as non-current assets, but something between $2 million and $3 million of that is available for sale in the period over the next three to six months," he said.

Mr Saunders said the company would likely use a mix of third-party funding and internal resources to support the companies it had invested in for the next year.

"We may recycle the realisation of some of our assets into other assets, but things are volatile at the moment and we'll make that decision at the time," added Mr Norman.

Strathmore shares closed at 6c.