Record first half-year profit for Somers
Somers Limited, the financial services investment holding company, has reported a record first half-year profit of $203.1 million.
The company’s fiscal year runs from October 1 to September 30. In its second quarter, which ended on March 31, it reported net income of $13 million. Its previously reported first quarter net income was $190.1 million.
Earnings per share were 60 cents, which compares to a loss per share of $4.65 in the same quarter a year ago.
Somers’ holdings include a 100 per cent shareholding in Bermuda Commercial Bank Limited, which it values at $69.6 million.
The company is awaiting Bermuda regulatory and Government approvals for the sale of BCB to Provident Holdings Limited, and said it hopes to receive these in the current quarter.
Somers said net asset value per share at the end of March was $28.69, compared to $19.78 at September 30.
Shareholders’ equity was $625 million, an increase of 48.1 per cent from the start of the financial year.
Somers’ other holdings include a 62.3 per cent holding in Resimac Group Limited, a leading non-bank Australian financial institution with over A$15 billion assets under management; a direct and indirect 64.4 per cent shareholding in UK specialist bank, PCF Group plc; and a 62.3 per cent holding in Waverton Investment Management Group Limited, a UK wealth manager with £10.7 billion assets under influence.
Resimac at $417.6 million, Waverton at $99.2 million, BCB at $69.6 million, and PCF at $44.6 million together represent 87.6 per cent of total investments, the company said.
After quarter end, Somers said it acquired a 15 per cent shareholding in the Aura Group, a Singapore headquartered alternative investment and wealth management platform.
Peter Durhager, chairman of Somers, said: “Somers’ investments continue to perform well against the Covid-19 backdrop and it is this strong performance which has enabled the company to declare a 14 per cent increase in the interim dividend to 24 cents per share.
“Somers’ net asset value per share has increased by 45 per cent to $28.69 in the first six months of the year and we were able to record a profit of $203.1 million for the first half of the year. These results have been principally driven by the growth in the share price of our largest investment, Resimac, but were assisted by improved results from a number of our other investee companies.
“The credit quality of the investee companies’ assets has improved and with the rollout of the Covid-19 vaccine and an improvement in global economic conditions, it is expected that the improved performance of these assets will continue.
“We believe our investments are well positioned to withstand future volatility and we are cautiously optimistic for the remainder of the year.”
During the quarter, Somers recorded a $14.4 million gain on its investment portfolio.
The majority of the company’s investments increased in value during the quarter although the gain was driven principally by an increase in the value of the company’s holding of Waverton whose assets under management and net income both improved over the quarter, the company said.
Net foreign exchange losses were $3.7 million for the quarter, compared to losses of $27.7 million in the same period a year ago.
At March 31, Somers said 85.9 per cent of its investment portfolio was exposed to foreign currencies, primarily the Australian dollar and sterling.
Over the course of the quarter, the Australian dollar decreased in value versus the US dollar by 1.5 per cent while sterling increased by 0.8 per cent. These exchange losses were primarily unrealised, the company said.
Somers’ total assets increased to $727.5 million. That compares with total assets of $508.6 million at September 30.
The investment portfolio was $719.9 million at March 31. That compares with $500.9 million at September 30.
Equity investments account for almost 99 per cent of this total, of which 74.6 per cent are listed investments, Somers said.
Total borrowings were $80.1 million at March 31, compared to $76 million at September 30.
During the quarter Somers bought back 4,141 shares at an average price of $16.47.