Terrain on acquisition trail despite losses
Listed financial services group Terrain Australia is predicting a loss of between $700,000 and $1,200,000 for the year ending June 30, 2002.
According to an Australian Stock Exchange (ASX) company announcement, Terrain Australia attributes the loss to a number of factors, including delays in sales of the group’s Queensland property portfolio, a significant investment in the establishment of the mortgage broking division, delays in realisation of integration and expansion benefits in the Terrain Securities business and increased interest and amortization charges and head office expenses.
Terrain Australia’s directors are claiming the 2001-02 financial year losses as a development stage in the growth and expansion of the group, and despite the poor returns, the directors are confident the group will report solid profits for the 2002-03 financial year.
The growth in director confidence comes as Terrain Australia announces it will look for acquisitions in the financial services industry. At present, discussions are ongoing with a number of parties.
Terrain’s Queensland property sales rate has increased in the past two months, showing further promise that the group’s performance will rise. Group directors say these properties should be fully sold by March 2003 netting Terrain Australia approximately $5 million in cash.
At an extraordinary general meeting to be held later this month, the group’s shareholders will be asked to approve the issue of up to $5 million in Redeemable Convertible Preference shares (RCP), which of this, $1.1 million has already been placed. The directors are currently looking to raise up to an additional $2 million through the issue of further RCP shares. This, coupled with the sale of the Queensland properties should give the group a significant cash resource to expand its operations over the next 12 months, the company claims.
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