Fri | Jan 19, 2018

Proven racks up revenue, but bond paddles bottom line

Published:Friday | June 3, 2016 | 12:00 AM

Proven Investments Limited nearly doubled its net revenues in financial year ending March 2016, but its profit dipped due to a hit it took from an impaired bond.

Revenue jumped from US$10.8 million to US$19.4 million, due to the first full year of acquisition of a stake in micro lender, Access Financial Services Limited.

Group net profit at US$4.3 million decreased 28 per cent due to the impairment and increased staff costs.

"This decline in profits for the year was due to the decision to rebalance some of our positions in the portfolio, reducing our exposure to the high-yield bond market and, specifically, the energy and mining sectors. Additionally, during the year, the portfolio was negatively affected by a bond-restructuring exercise and an impairment loss of US$1.7 million on an energy-related security," said Proven in its newly released audited results.

Proven acquired 49.27 per cent of the issued shares of Access in December 2014, stopping short of the threshold for a takeover. The acquisition is expected to provide an "enhanced level of income, above-average returns" and preservation of capital for shareholders of the company, said Proven.

Access Financial contributed revenue of US$9.26 million to the group, compared to US$2.41 million a year earlier. It also received post-acquisition profit of $3.9 million compared to US$1.2 million a year earlier.

Proven other businesses include Proven Wealth, PWL Transition Limited, Proven REIT, and Asset Management Limited and Access. Through Proven REIT, the group has partnered with Matalon Homes in a joint operation to develop studio apartments at 8 Kingsway in Kingston.