The financial woes look set to continue for First Capital Group (First Capital) with the financial services business recording a net loss of nearly $13 million for the 2006/07 year.
The listed financial services group’s total net loss for the period was $12,967,580.
First Capital acting managing director Tom Wallace said it has been a difficult year for the group with a number of business initiatives stretching resources and performing below expectations.
“First Capital has not been able to finalise the acquisition of Explorer Group within the financial year and the subsequent cost impact on the business was substantial,” Wallace said.
“The current board has taken a conservative and prudent approach in line with the Australian Equivalent of the International Financial Reporting Standards.”
Wallace said the loss was partly driven by the write-off of the costs associated with the Explorer Group acquisition and other previous management initiatives.
First Capital has been entangled in a melee with Explorer Group major shareholder John Aldersley for more than 12 months.
The two groups have been battling over the purchase of Aldersley’s remaining 60 per cent stake in Explorer Group.
However, First Capital may be a step closer to resolving the matter with Explorer Group with First Capital completing the sale of its 30 per cent interest in Explorer Group to Ascalon Capital Managers (Ascalon).
Ascalon will pay $3 million to enable First Capital to complete its obligations in relation to the purchase of the Explorer Group’s 30 per cent interest.
“Rather than raising further debt and/or equity in the current market conditions, the board of First Capital has determined that it is in the best interests of the company and its shareholders to sell its 30 per cent in Explorer Group on the terms agreed to with Ascalon,” Wallace said.
Ascalon is co-owned by St George Bank and Kaplan Equity. Each holds 50 per cent of the shares in Ascalon.
