KEY POINTS:
Southern Capital, formerly Hirequip until it sold its hire business last year, has reported a net profit after tax of $57.4 million for the December half year.
During the period the company sold Hire Equipment Group Ltd, the principle operating subsidiary that owned all the hire and related businesses of the group, for $166.9 million.
Further payment could come from an earn out arrangement, which the company said could be between nothing and $7.5m, but was likely to be under $2.5m, reflecting expectations that the second half of the financial year would be less buoyant.
The company also sold its 21.75 per cent shareholding in Tasman Farms Ltd for $9.6m and achieved final settlement of Pegasus Bay Town for $14m.
Earnings before interest and tax for the period was $64.9m, the company said today.
Of that, $6.1m came from operating earnings of the hire business before it was sold, $16.1m came from profit on the sale of legacy assets principally Tasman Farms and Pegasus, and $42.7m reflected gains on the sale of the hire business.
Profit from ordinary activities after tax was $11.5m, compared to $1.1m in the corresponding period a year earlier, while revenue from ordinary activities was up 25 per cent to $44.4m.
An interim dividend of 2.5 cents per share was paid last Friday.
In other developments, a n offer by the company at $1.115 per share to buy back up to 14.75 per cent of the issued capital was mailed to shareholders on February 16 and is open until March 16 unless extended.
Meanwhile, Lynwalsh Holdings, a company registered by Southern Capital directors Stuart McKinlay and Trevor Scott, has made an offer for all of the shares in Southern Capital at a price of $1.197 per share.
Southern Capital said today that its independent directors would issue a target company statement shortly in response to the Lynwalsh bid.
The statement would contain an independent valuers report and a recommendation from the independent directors.
Southern Capital shares were up 1c in early trade today to $1.17, having ranged between $1.30 and 81c in the past year.
- NZPA
