Bermuda First Investment Company Limited ( BFIC or the Company )

Transcription

1 December 6, 2013 Bermuda First Investment Company Limited ( BFIC or the Company ) Financial Results for three months ended September 30, 2013 For Immediate Release- (Hamilton, Bermuda) Bermuda First Investment Company Limited, a BSX listed investment holding company with a number of significant investments in BSX Bermuda listed companies, is pleased to announce its results for the quarter ended September 30, Highlights: Profit in the quarter of approximately $0.4 million (before an unrealised loss on the Company s investments of approximately $1.1 million); Revenue in the quarter of $0.8 million; Market value of investments as at September 30, 2013 of approximately $42.2 million; Acquisition of 935,000 shares in KeyTech Limited, increasing the Company s holding in KeyTech Limited in excess of 30%; Draw down in full of the loan facility from the Bank of N.T. Butterfield & Son Limited; and Exercise of 100,000 warrants which raised $1.0 million for the Company. Commenting on the financial results, J. Michael Collier, Chairman of BFIC said: The highlight of the quarter was the acquisition of an additional significant stake in KeyTech thereby increasing our shareholding to over 30%. As the largest shareholders in KeyTech we look forward to working more closely with KeyTech s Board and management. The economy in Bermuda still remains difficult and as such the financial performances of our investments, whilst stabilising, we believe remain challenging in the short term. Media Contacts: Alasdair Younie Director Bermuda First Investment Company Limited Tel: ay@icm.bm

2 Financial summary For the quarter ended September 30, 2013, the Company reported revenue of $0.8 million and profit of $0.4 million (before an unrealised loss on its investments of approximately $1.1 million, relating to the movement in the value of the Company s investments between July 1, 2013 and September 30, 2013). Total expenses were $0.4 million with $0.3 million relating to accrued interest expense on the Company s unsecured 2019 loan notes. The Company s undiluted loss per share was $0.35 (diluted $0.28). As at September 30, 2013, the Company s investments had a total value of $42.2 million. The Company had shareholders funds as at September 30, 2013 of $19.4 million, bank debt of $5.4 million and unsecured long term seven year loan notes that it issued to its founder shareholders in October 2012 of $17.1 million. During the quarter the Company drew down in full on its $5 million loan facility (the Facility ) with the Bank of N.T. Butterfield & Son Limited ( Butterfield ). The Facility is a twelve month revolving credit facility and it was used to acquire 935,000 shares in KeyTech Limited. Investments KeyTech Limited ( KeyTech ) During the quarter the Company increased its holding in KeyTech by 1,031,616 shares. The Company is now interested in approximately 30.1% of KeyTech s issued share capital which as at September 30, 2013 was valued at approximately $26.6 million. We expect KeyTech will shortly release its results for the six months ended September 30, 2013 and we hope that those results will begin to show the benefits of the corporate transactions that KeyTech has completed in the last 12 months along with the cost reduction measures put in place by KeyTech s management. We continue to believe that KeyTech s share price remains undervalued but we are conscious of the continuing difficult economic environment in Bermuda and the impact that the significant reduction in Bermuda s population is having on companies such as KeyTech. Given the size of our holding in KeyTech we look forward to working with KeyTech s management in order to enhance value for all stakeholders. Ascendant Group Limited ( Ascendant ) Ascendant released its results for the six months ended June 30, 2013 on September 18, Consolidated net earnings were $1.8 million (2012: $4.8 million) or $0.13 per share (2012: $0.46 per share). Ascendant s earnings are seasonally affected with the second half of the year being significantly stronger than the first. However, net earnings in ifm Limited and Air Care Limited improved by $1.6 million over the corresponding period in Electricity sales at BELCO were unchanged at $66.9 million. This is principally due to the 3.8% increase in rates which took effect form January 1, Total kilowatt hours sales declined 3.7% when compared to 2012.

3 Residential sales increased slightly but commercial sales declined due to the poor economy will be the fourth consecutive year that Bermuda has recorded reduced kwh consumption on the island. Bermuda Gas revenue fell by approximately $1.2 million due to competition in the commercial business sector and aggressive pricing by competitors. The Company currently owns 85% of Air Care and this holding will increase to 100% in 2014 based on a pre-agreed multiple. Changes in actuarial assumptions resulted in a significant, unanticipated $905,000 increase in the expense incurred to meet legal funding requirements of this pension plan. Ascendant s book value as at June 30 was $ It is clear that Ascendant s operating performance in the short term will continue to be affected by Bermuda s economy. However, it does appear as though residential usage is plateauing which is promising. The political rhetoric in recent months in relation to BELCO and Ascendant has been disappointing. BELCO is faced with a number of decisions in terms of its strategy moving forward. These decisions, which will positively affect all BELCO users, are likely to necessitate significant CAPEX investment. Ascendant needs all stakeholders to be moving in the same direction to ensure that its investment decisions can succeed. BFIC is interested in approximately 10% of Ascendant s issued share capital and as at September 30, 2013 it was valued at approximately $12.2 million. Argus Group Holdings Limited ( Argus ) We expect Argus to release its results for the six months ended September 30, 2013 shortly. We anticipate that the financial results will continue to show an improvement as shown in Argus full year results. However, with yields increasing in the bond market in anticipation of a taper of the US Federal Reserve s US quantitative easing, the Argus fixed income portfolio may have been adversely affected in the six months ended September 30, We expect operations to be steady with growth limited by the impact of the Bermudian economy. The Company is interested in approximately 2.5% of Argus issued share capital and as at September 30, 2013 it was valued at approximately $2.3 million. Other investments The Company s other investments include small holdings in The Bank of N.T Butterfield & Son Ltd ( Butterfield ), West Hamilton Holdings Limited, Bermuda Aviation Services Limited and Watlington Waterworks Limited. We see little improvement in Bermuda s economy in the short term. However, the rate of decline has undoubtedly slowed and it may be that the economy is plateauing. If this is the case than we expect the Company s investments to report results in keeping with what has been reported over the last 12 months. We are pleased to note that the Government is making Bermuda a more attractive place to undertake business. However, ultimately Bermuda requires an increase in the population, driven by international business, which will have significant positive effects for the results of all our investments.

4 BERMUDA FIRST INVESTMENT COMPANY LIMITED Statement of Financial position (Expressed in Bermuda Dollars) As at September 30, 2013 Assets Investments - at fair value through profit or loss 42,181,511 Dividends receivable 756,563 Prepayments and other assets 1,749 Total Assets 42,939,823 Liabilities $ Bank Overdraft 424,563 Dividends payable 367,866 Interest Payable 493,286 Loan Notes 17,142,200 Bank Loan 5,000,000 Accounts payables and accrued expenses 101,750 Total Liabilities 23,529,664 Equity Share Capital 18,393 Share Premium 18,374,887 Retained Earnings 1,016,879 Total Equity 19,410,159 Total Liabilities and Equity 42,939,823

5 Income Dividend Income 796,355 Net realised gains on investments 20,286 Expenses BERMUDA FIRST INVESTMENT COMPANY LIMITED Statement of Comprehensive Income (Expressed in Bermuda Dollars) Period from July 1 to September 30, 2013 $ 816,641 Interest expense 279,008 Management fees 52,625 Legal fees 10,134 Audit fees 5,500 Director's fees 9,000 BSX listing fees - Custodian fees 3,750 Administration fees 2,500 Corporate secretrial fees 875 Listing sponsor fees 1,250 Other operating expenses 5,662 Total Expenses 370,304 Net change in unrealised gains/loss on investments - at fair value through profit or loss (1,098,887) Net Income for the period (652,550) -Ends- Bermuda First Investment Company Limited is a Bermuda exempt investment holding company with significant investments in a number of BSX listed Bermuda companies. Its main investments are in KeyTech Limited and Ascendant Group Limited. The Company s core strategy is to build strategic investments in local Bermudian companies. BFIC s shares and loan notes are publicly traded and listed on the Bermuda Stock Exchange (Tickers: BFIC.BH and BFICN.BH).