Andrew Green, Acting Financial Editor
Gary Peart, CEO of Mayberry Investments Ltd. - RICARDO MAKYN/STAFF PHOTOGRAPHER
THE NUMBER might be small but critically it was a positive one.
Mayberry Investments yesterday reported a $33.6 million net profit for its first quarter ended March 31. The unaudited number follows two previous consecutive quarters of losses amounting to about $147 million in total.
"These results are very encouraging," said chief executive officer Gary Peart. "It shows a positive trend."
NET PROFIT
Mayberry ended the 2005 financial year with an $88 million net profit. But that figure masks a rollercoaster ride with profit falling from $157 in the first quarter to $78 million in the second and bottoming out with a $118 million loss in the third quarter as the company's big equities portfolio weighed it down with unrealised losses as stock values plummeted last year.
In the last quarter of last year the company chalked up a $29 million loss followed by the $33.6 million profit in the March quarter.
"It is an upward sloping graph," Mr. Peart said. "I think we have reached a turnaround point."
In his chairman's report released along with the results, Christopher Berry indicated the significance of the $70 million in unrealised stock portfolio market losses in this year's March quarter. This resulted in a $113 million 'negative movement' in unrealised gains compared with the quarter ended March 2005.
IMPORTANT MITIGATING DEVELOPMENT
An important mitigating development was the $47.9 million gain on sales of investments for the quarter, compared with a $4.7 million loss for the March quarter last year. This represented a $52.6 million positive swing in the income statement.
The five per cent growth in net interest income to $137 million was also significant as the company pulls itself out of its heavy reliance on stock market earnings. The company is building alternative income streams which should start to impact more on its earnings by the next quarter.
"We are moving to the next step. We are not just an equities company," Mr. Peart said. "By first quarter of 2007, we will be able to grow overall profits whatever the stock market is doing."
