First Capital posts six-month pre-tax profit of Rs. 157 million

First Capital Holdings PLC has reported profit before tax of Rs. 157 million on income of Rs. 657 million for the six months ending 30 September 2011, a period of relatively subdued trading for its primary dealership First Capital Treasuries.

According to income statements released to the Colombo Stock Exchange, the First Capital Group’s net profit for the period was Rs. 118 million, and profit attributable to equity holders of the parent company was Rs. 114.3 million.

These income and profit figures, although lower than those of the corresponding six months of 2010-11, were well above budgeted targets for the first half of the current financial year, a spokesman for the Group said.

He explained that income and profit figures in the corresponding six months of the preceding financial year had been boosted by extraordinary factors. In 1H 2010-11 First Capital Holdings achieved exceptional gains of Rs. 192 million from bonds as a result of falling interest rates. Profits were further enhanced by a tax reversal of Rs. 443 million following a Board of Review decision in a subsidiary’s favour.

In the comparatively ‘settled’ conditions for trading in government securities in the review period, gains from bonds totalled a moderate Rs. 36 million, the spokesman disclosed.

However, other areas of income, such as fee income from the structuring and placement business of First Capital Limited have shown noteworthy growth in the six months reviewed, during which fee income nearly quadrupled to Rs. 44.4 million, he said. Similarly margin trading income from First Capital Markets almost doubled to Rs. 61 million in the first half of 2011-12, the spokesman said.

Additionally, a new Unit Trust, the First Capital Wealth Fund launched by First Capital Asset Management Limited in the third quarter of last year, is also recording steady progress and has made a worthwhile contribution to the Group’s results, he added.

One of the highlights for the six months under review was the acquisition by First Capital Holdings of 19.99 per cent (9,250,000 ordinary shares) of Orient Financial Services Corporation Limited for Rs. 90.465 million.

Formerly V Capital PLC, First Capital Holdings PLC is a leading financial solutions provider with an extensive product offering ranging from investments in treasury bills and bonds to margin trading, wealth management and corporate debt. The Group achieved a net profit after tax of Rs. 983.4 million and revenue of Rs. 1.7 billion for the year ending 31 March 2011.The Board of Directors of First Capital Holdings PLC comprises of Deshamanya Lalith de Mel (Chairman), Nihara Rodrigo,  Eardley Perera, Manjula Mathews and Dinesh Schaffter.