Controversial holding company Guardian Capital, formerly known as Watapota Investments, which is majority owned by Sri Lankan multinational Carsons Cumberbatch, recently issued its annual report for the 12 months to end-March 2011. This document indicated that the company had an annual revenue of Rs. 2.99 million, down 96% from 2010's Rs. 67.47 million.
Additionally, the company was impacted by an after-tax loss of Rs. 9 million, a fall of 157% compared to 2010's after tax profit of Rs. 15.76 million.
Garnering significant media attention at the beginning of 2011, sparked by a five-way bidding war which prompted the company's share price to climb from Rs. 40.60 to Rs. 95.00, virtually overnight, the company again stood out for its recent successful rights issue which enabled its raising Rs. 503.20 million. As a result, the company's total assets has increased to Rs. 513.63 million, a 387% rise from 2010's Rs. 105.55 million. At the same time, its market capitalisation also increased 1,019% to Rs. 7.50 billion, from 2010's Rs. 671.00 million. However, this is despite the market value of its investment portfolio being only Rs. 473.21 million, up 349% from 2010's Rs. 105.48 million.
Also having emerged in the company's annual report, "[all] cash surpluses during the period of review have been invested in fixed income investments, yielding an average return of 6.7%." Further, the company also revealed it had changed its strategy to long term, private equity investments and for its first such investment it had ploughed in Rs. 252.10 million for 41.6 million shares of logistics and transportation firm Expolanka Holdings, a company which recently oversubscribed its Initial Public Offering at Rs. 14 per share, while Guardian Capital paid Rs. 6.06 per share. Its second such investment being Rs. 35.32 million shelled out for 2.34 million shares of Textured Jersey. Also noted, it was on the look out for more opportunities whereby it could invest the balance of its assets fund, Rs. 226.20 million.
In addition, the annual report also indiciated that, while net asset value per share of the company was Rs. 152.80 at the end of the 2009/2010 financial year, it had gone down to Rs. 20.80 following a pay out of a dividend of Rs. 132.00 per share. This line item also decreased further following the rights issue, falling to Rs. 19.71 as of the end of the 2010/2011 financial year. |
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