Global Capital reports improved performance

GlobalCapital p.l.c. registered an improved performance for the first six months of this year when compared to the corresponding period in 2009.

While registering profits in the life insurance and investment divisions, the group has also reduced its losses to €1,415,260 after tax for the six months ending June 30, compared to a loss of €2,287,330 for the corresponding period in 2009.

GlobalCapital Life registered a profit before tax of €682,550 compared to a prior year profit of €368,135. The life company registered a marginal reduction in premium income when compared to the previous year, compensated for by a significant decrease in insurance claims and surrenders when compared to the corresponding six months ended June 30.

The group also experienced positive developments in its balance sheet, registering marginal growth for a balance sheet value which now totals over €100 million.

The current period's group results were adversely impacted by a €790,593 charge arising from the share of loss of the associated undertaking, Metropolis Developments Limited.

After the reporting period ended, the company entered into an agreement for the sale of the group's entire shareholding in the Metropolis Group.

The de-recognition of this investment will be for a consideration of €3,805,957.

The group will, therefore, recoup all historic losses recognised over the years through its equity accounting of this investment.

Consequently, goodwill allocated to this unit would be reversed at December 31.

The divestment of the Metropolis shareholding is in line with the strategy of the group to focus on strengthening its financial services division, in particular its insurance activities. It is the group's intention to dedicate the necessary resources and management focus to achieve this objective.

Throughout this reporting period, GlobalCapital continued to monitor expenditure while implementing the revitalisation programme launched in the second half of 2009.

Cost containment efforts did not impinge negatively on the group’s implementation of the revitalisation strategy with fresh investments in additional staff, training programmes and marketing, all forming part of the second phase of the revitalisation programme.

This program focuses on further strengthening the company’s drive in achieving its growth objectives through a special focus as insurance specialists.

The board of directors also announced that it will continue to invest further in resources particularly in preparation for the introduction of the new set of regulatory requirements for insurance firms operating within the European Union. Solvency II is scheduled to come into effect in early 2013, establishing a revised set of EU-wide capital requirements and risk management standards replacing the current Solvency requirements.

The investment division has registered a growth in revenue of over 50 per cent when compared to the prior reporting period under review.

The property division also reported a modest increase in revenue, mainly attributable to an increase in the rental occupancy levels.

During the period under review the division also completed a block of offices in Testaferrata Street, together with a block of apartments in Madliena with the first sales also being registered in this period.

“Even though the company continues to show signs of improvement, we continue to monitor the macroeconomic environment very closely.

“We are aware that the financial markets are slowly beginning to recover as seen in a number of European and non-European countries but we maintain a cautious outlook.

“The volatility in the stock markets is expected to persist in the forthcoming months which will impact the valuations of the financial assets of the Company.

“For this reason a careful and vigilant attitude is essential to ensure that the company remains prepared to any sudden shifts,” said group chairman Nicholas Ashford-Hodges.