Southern Capital on track for future profits
By Ben Dutton
Southern Capital has reported a loss of $1.39m for the year ended 30th June, 2000 but says its new financial year has started well and the company expects a positive result next year.
SCL says the year was a period of stark contrasts - seeing its entrepreneurial investment deals perform exceptionally well, but also experiencing the disappointment of booking a significant loss on the realisation of CBD's Albert Street office building.
The investment company's report, which is its first since amalgamating with CBD NZ, also details the much talked about holdings in sharemarket darlings A2 Corporation and Blis Technologies.
Southern Capital owns 1.925m shares in A2 Corporation, which it describes as a "biotechnology company that has patents pending internationally over testing processes that identify certain genes in cows."
Southern Capital's investment was made at a book cost of 2 cents per share. At its current trading range of around $1.50 on the Unlisted Securities market, the investment is now valued at around $2.89m. While the company realises that there is some way to go before full commercialisation of the technology is achieved, they believe the upside clearly outweighs the risk.
Blis Technologies, another biotechnology company formed by Dunedin based OtagoTrust and a group investors, also has Southern Capital's backing. SCL has 6.29 million shares in Blis, with the average cost per share being less than 10 cents. SCL's unrealised profit in this investment is now standing at around $5.86m.
Southern Capital's other investments also include a holding in EstarOnline (not to be confused with the Australian sharebroker of the same name), ownership of the Flight Centre building (which is on the market) and the Omaha Beach settlement, which the company regards as a long term project.
Southern Capital believes that with no debt on its balance sheets, it is in a good shape to take advantage of future investment opportunities. The company expects to continue its focus on shorter term entrepreneurial property transactions and equity investments.
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