Asia Capital PLC on Friday said it has joined the billion rupee profit per-year club in terms of the un-audited accounts for the 12 months ending March 31, 2011 by recording an Rs.1 billion net profit after all expenses for the Asia Capital Group.
“This is an increase of over 350% compared to the audited results of 2010. Approximately 30% of that profit has been from gains from the sale of investments through Asia Capital PLC, principally from the sale of Capital Reach when that company was purchased by Asia Capital PLC in 2008 and disposed in 2010, together with some gains from short term investments in the secondary market. These profits are indicative of the true wealth of the investment company,” the company said.
Manohan Nanayakkara, Chairman of Asia Capital PLC said in his review that, “for example at the current market valuation, Asia Capital’s 54% stake of Asian Alliance Insurance is worth more than US$50 million, representing over 56% of the market capitalisation of Asia Capital.
Several other majority holdings of Asia Capital, specially Asia Asset Finance and Asia Leisure when added together, surpass US$90 million the market capitalisation of ACAP at its current price.”
He said from time to time when “we feel that the markets are buoyant and the valuations are not un-attractive, we shall dispose some of our investments to realise capital gains. This will continue to be one of the principal activities of Asia Capital to create shareholder value.”
Stock broking and investments accounted for 29% of the group profits last year. Deposit mobilisation and credit accounted for 10%. Insurance accounted for 34%.
The return on net assets (RONA) of Asia Capital is at 50% which is very respectable and quite high compared to its peer companies, the company said.
Earnings per share for the group for the year is at approximately Rs.10 and this more than justifies the current market value at Rs.90 for ACAP which is a PE of only 9. “I am confident that even that company is well positioned for the future, particularly due to the new segments that we are entering into,” the chairman said.