LONDON (Alliance News) - Indian real estate and infrastructure fund Trinity Capital PLC Tuesday said it swung to a loss in the full-year, after it was hit by valuation losses.
The company said much like the performance of the Indian economy, its last financial year was "rather disappointing for the company, measured by the number of investment realisations."
Trinity Capital posted a pretax loss of GBP12.1 million for the year ended March 31, compared with a GBP2.7 million profit a year earlier. It made a GBP24.1 million net loss on disposal of investments during the year, compared with a GBP14.4 million loss a year earlier.
During the financial year, Trinity witnessed a reduction of 31% in the value of the three investments jointly held with the funds managed by SachsenFonds Holding GmbH. Trinity said it has initiated discussions with SachsenFonds and its partner Deutsche Fonds Holding with a view to trying to better understand the issues facing each of the stakeholders, protect the value of our joint investments and eventually unscramble the relationship.
"The German funds operate under a cloud of confidentiality and the lack of transparency and public information makes it difficult for us to assist in developing mutually beneficial solutions," Trinity said.
The only asset to be sold during the year was the investment in Luxor Cyber City, which generated proceeds of GBP9.2 million and funded most of the distribution to shareholders of GBP10.5 million. At the end of March, Trinity held five investments in India, valued, after allowing for the co-investors' interests, at a total of GBP22.8 million, equivalent to 10.9 pence per share.
Trinity said economic conditions in India continued to "stagnate" for much of the year.
"Activity in the property sector was muted as a result of limitations on mortgage lending from banks and non-bank financial institutions, high interest rates and low GDP growth and consumer demand," the company said.
During the 12 months to March 31, 2014, the Bombay Stock Exchange's Realty Index rose by 3% compared with a 19% increase in the benchmark SENSEX. Business sentiment is, however, changing as a result of the election in May of a new central Government with a clear parliamentary majority, the company said.
Trinity said that "If the government delivers on the promised economic reforms and the return of business confidence boosts economic activity, investment, lending and consumption, then the property market will gradually recover."
Financially, at the end of the year the company said it held GBP7.6 million in cash.
In a separate statement Tuesday, the company said it plans to distribute 2.5 pence per share to shareholders next month. The distribution, equivalent to GBP5.3 million, will be financed from the distributable reserve created by the cancellation of share premium account that took place shortly after the company was admitted to AIM in 2006.
Trinity Capital shares were quoted down 0.5% at 8.71 pence Tuesday afternoon.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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