First Capital reports Rs 58 m profit in Q1

First Capital Holdings PLC has posted a healthy profit before tax of Rs 95.7 million for the three months ending June 30, 2010, despite declining interest rates and thinning margins.

The company has reported a net profit of Rs 57.8 million for the quarter against a turnover of Rs 408.7 million, in a performance it describes as strong in the context of the absence of the exceptionally favourable conditions that prevailed in its field of business in the corresponding quarter of last year.

Profit attributable to equity holders of the parent company was Rs 51 million for the three months reviewed.

"The high interest rates of the last financial year generated unsustainably high gains from investments in government securities," a spokesman for the company said.

"Although this cycle has now slowed, the company has sustained its momentum with strong performances from all of its business units."

"We are now operating in relatively settled market conditions as far as government securities are concerned," he said.

"As expected, the spread between the securities held by the company and the rates at which it funds these securities has reduced this year, narrowing margins," he said.

He disclosed that the company had made a capital gain of Rs 19 million from bonds in the first quarter of the current year as against a gain of Rs 360 million in the first quarter of 2009-10 from the same source.

First Capital Markets (FCM) the First Capital Group's SEC approved margin provider for listed equity has benefitted from the buoyancy in the stock market, the spokesman added.