LinQ Resources has reported an improved profit result, one week after announcing the company would be taking a more activist approach to future investments.
LinQ Resources has reported an improved profit result, one week after announcing the company would be taking a more activist approach to future investments.
LinQ's profit of $35.5 million for the 2010 financial year compared to a net loss of $193.5 million for the previous corresponding period and was achieved on revenue of $45.4 million.
LinQ has stakes in several mining companies including Atlas Iron, Lihir Gold, Ferrous Resources and Riversdale Mining.
The company's net tangible assets per unit increased 19 per cent over 2010.
LinQ declared a final dividend of 3 cents per share.
"During the year we announced the Fund would be taking a more active role in its investments, and we have already started exercising this policy successfully with some of the Fund's investments," said LinQ chairman Gordon Toll.
"The Board is continually looking to enhance investor returns, and this more pro-active hands-on approach towards the Fund's investments forms the basis for the Board convening a unitholder meeting later this year to revise the investment strategy of the Fund," the company said in a statement.
On August 19 Laxey Partners withdrew its push to take control of LinQ
In July, Isle of Man-based Laxey, through its nominee HSBC Custody Nominees, requested that LinQ convene a meeting of its unit holders to consider appointing The Trust Company as the Fund's responsible entity.
The Trust Company did not explain its intentions for LinQ or its association with Laxey, which has acquired a 9.9 per cent shareholding in LinQ.
See company statement below:
The LinQ Resources Fund ('the Fund') has recorded a NPAT of $35.3 million for the year
- Net tangible assets per unit increased 19%, with the Fund's share price up 25%
- The Fund remains debt free and continues record of paying consistent distributions every year since listing
- Consistent with its investment strategy, the Fund has taken a more active role in select investee companies to help improve the Fund's earnings stream
- Core investments included Ferrous Resources, Riversdale Mining, Atlas Iron, and Lihir Gold
The LinQ Resources Fund (ASX:LRF) today lodged its 2010 annual report to unitholders, which highlights the strong rebound experienced by the Fund since the impact of the GFC. NPAT of $35.3 million compares with a net loss of $193.5 million in the previous year, which positively contributed to NTA growth of 19%, and unit share price growth of 25%.
The Fund paid a distribution of 3c per unit for the financial year, representing a yield of approximately 4.3% on the 30 June 2010 closing unit price. This year's distribution continues to highlight the Fund's strategy to pay distributions to unitholders every year since listing in 2005. The distribution was paid on 30 August 2010.
Chairman of LinQ, Mr Gordon Toll said: "During the year we announced the Fund would be taking a more active role in its investments, and we have already started exercising this policy successfully with some of the Fund's investments.
The Board is continually looking to enhance investor returns, and this more pro-active hands-on approach towards the Fund's investments forms the basis for the Board convening a unitholder meeting later this year to revise the investment strategy of the Fund.
Whilst we will continue to offer investors a diversified investment portfolio, we will seek to increase the mix of the Fund's earnings stream to more annuity income from taking larger stakes in companies, including JV positions. This will assist in positioning the fund valuation more to a valuation based on earnings rather than NTA."
Outlook
The favourable growth outlook for Asia and more specifically in the developing countries and markets such as China, India, Russia and Brazil saw the resources sector rebound from the lows of the GFC.
The longer term prognosis for the resources sector remains very positive despite the current volatility in the key equity markets.
