09/04/2020 - 14:41

Euroz flags $16m loss

09/04/2020 - 14:41

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Stockbroking and funds management group Euroz expects to report a loss of $16 million for the nine months to the end of March but said its trading activity is still profitable and it intends to pay a final dividend.

Euroz flags $16m loss
Euroz chairman Andrew McKenzie. Photo: Attila Csaszar

Stockbroking and funds management group Euroz expects to report a loss of $16 million for the nine months to the end of March, but said its trading activity was still profitable and it intends to pay a final dividend.

The biggest contributor to the unaudited loss was the write-down in the value of its listed investment companies Westoz Investment Company and Ozgrowth, in line with the collapse in global sharemarkets last month.

This will deliver a non-cash loss of $14 million for the nine months to March, a dramatic turnaround from the six months to December, when they contributed a $4.8 million profit.

Euroz will also incur an $8 million loss from the winding-up of its Prodigy funds management joint venture, as previously announced.

Partly offsetting these losses is a $6 million cash profit from the group’s trading and stockbroking activities.

The group had already booked a cash profit of $4.5 million for the six months to December, indicating the March quarter was only marginally profitable.

The company noted a couple of positives in an update released today by executive chairman Andrew McKenzie.

It said trading activity by Euroz Securities on the ASX and Chi-X exchanges in March had been the strongest month for the year to date, as a result of volatility.

“We have continued to executive some modest ECM transactions and are optimistic the trend for companies to source new equity capital after a major downturn in equity markets may start to play out for us in the coming months,” the company stated.

Euroz emphasised it has a strong balance sheet and said its services were continuing despite COVID-19 restrictions.

Based on its underlying profitability, the group said it intends to pay a final dividend later this year.

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