GlobalCapital p.l.c. sustains profit trend throughout first half of 2015

A positive trend that started for GlobalCapital plc in the second half of 2014 has been sustained throughout the first six months of 2015 as the Group’s operations remained in positive territory for two consecutive reporting periods covering twelve months.

In a company announcement published on the Malta Stock Exchange, GlobalCapital p.l.c. released the Group’s financial statement for the first six months of 2015 and announced a profit before taxation of €1,176,197 compared to a loss of €966,897 for the same period in 2014.

The Group had recently announced a profit after taxation of €222,671 for the financial year ending in 2014, marking the Group’s return to profit territory for the first time in the last seven years.

The Group’s profit for the first half of 2015 represents earnings per share of 3c7 compared to a loss per share of 7c8 for the January – June 2014 period. In their interim report published as part of the financial statements, the Directors are not recommending the payment of an interim dividend.

The Group’s encouraging financial turnaround comes as a result of an aggressive transformation strategy approved by the Board of Directors and implemented by the Management team, led by Chief Executive Officer Reuben Zammit, that kicked off in the second six months of 2014.

As already explained in earlier statements and Company announcements on the Malta Stock Exchange, the positive effects of the restructuring process are manifested in full in the Group’s 2015 financial performance, across all levels and operations of the Group.

Commenting on this continuing positive trend for the Group, Chief Executive Officer Mr Reuben Zammit said “GlobalCapital has started to bear the fruit of hard work and tough decisions carried out in the second half of 2014.

The strategic decisions approved by the Board and implemented by the new Management Team are proving to be the right path for the Group’s financial wellbeing.

The key objectives set out in June 2014 have been implemented with a large degree of success. More work remains to be carried out in the near future to ensure that the Group’s financial sustainability is placed on long-term solid foundations.”

Directors’ interim report

After giving due consideration to the Group’s business activities, together with factors which are likely to affect the Group's future development including the impact of the external financing options available, and based on information currently available, the Directors consider that the Group has the plans and resources to manage its business risks successfully.

In this context, the Directors have declared a reasonable expectation that the Company and the Group will have adequate resources to continue their operations for the foreseeable future. For this reason, they continued to adopt the going concern basis in preparing the financial statements.

GlobalCapital Life Insurance (GCLI)

For the period under review, GlobalCapital Life Insurance (GCLI) registered a substantial increase in profits before tax when compared to the same period in 2014, from €651,624 in 2014 to €1,000,961 in the first six months of 2015.

This improvement in profitability is a direct and positive effect of adopting an exclusive focus on the Group’s core business activity - insurance - as a strategic direction for the future growth of GlobalCapital. Premiums paid registered a substantial increase between the comparable reporting periods.

In addition, the cost cutting measures implemented in the latter half of 2014 are now fully manifested in the 2015 performance. Fair value gains were, in part, offset by the investment write down of the equity value of Bramer Bank, following the revocation of the banking licence by the Financial Services Commission in Mauritius.  

Shareholder matters

During the period under review, the Financial Services Commission in Mauritius appointed Conservators for BAI Co (Mtius) Ltd, which holds 48.45% of the Ordinary Shares of GlobalCapital p.l.c. In early May 2015, a conditional offer was made by EIP plc, a Malta registered company to acquire the entire shareholding held by BAI Co (Mtius) Ltd.

In mid-July 2015, EIP plc and the Conservator entered into a share purchase agreement for the transfer of the 48.45% shareholding subject to certain conditions, which the Directors understand are usual in such transactions.

As a result of the these developments, the present reconstituted Board has reversed the prior Board decision to divest of the Group’s investment and advisory function, having been informed that it is the intention of the prospective shareholder to expand the investment operation both locally and in other European countries.

This reversal was the only deviation from the Group’s restructuring plan as laid out to the Annual General Meeting in July 2014.

Investment and Agency business

The Group’s Investment Division registered marginal growth in revenue compared to the first six months of 2014. Coupled with the significant reduction in the company's cost base, the Group’s investment arm moved back into profit territory for the first time in 9 years. The investment company registered a profit before tax of €128,760 compared to a loss of €460,969 reported as at the end of June 2014.

Revenues from the Agency business registered marginal growth too. The profit before tax for the first six months of 2015 remained in line with the comparable period of the previous year, totalling €477,777 compared to €476,117 for the first six months of 2014.

The Group’s rental property portfolio experienced an increase in revenue as a result of full occupancy and higher rental rates.

GlobalCapital Financial Management Limited is licensed to provide investments service in Malta by the Malta Financial Services Authority (MFSA). GlobalCapital Insurance Brokers Limited carries on business of insurance broking and is regulated by the MFSA. GlobalCapital Life Insurance Limited is authorised to transact Long Term Insurance Business and is regulated by the MFSA. GlobalCapital Health Insurance Agency Limited acts as an insurance agent and is regulated by the MFSA. Registered address: Testaferrata Street, Ta’ Xbiex XBX1403, Malta