PR pins hopes on investments
Article Date: Jun 05 2001City of London chief executive John Greenhalgh remains cautiously optimistic about the prospects of his firm's growing investment portfolio despite a lacklustre performance from the public relations business. Leslie Copeland reports.
Greenhalgh said the performance of the PR business had been affected by the contraction in the mining industry and the low Australian dollar exchange rate, leaving PR profits down at £60,872 (£140,719) on reduced sales of £523,528 (£600,755).
However, he suggested that these results had actually 'masked' improvements in the prospects of the company's range of investments.
City of London (CIN) sports an investment portfolio of 12 quoted holdings including Bank of Scotland, Abbey National, Prime People, Osmatec, Emerald Energy and Bristish Aerospace. Greenhalgh said that during a year of instability, this portfolio had 'shown resilience', as its value had increased from £3.0 million to £4.49 million. Interest payments, dividends and the sale of an investment pushed income up to £787,000 enabling the group to post a total pre-tax profit of £623,923 (£707,414).
On top of these assets, the group has invested heavily in three unquoted companies, any one of which says Greenhalgh could become 'a serious asset'.
The three unquoted companies are RCHIVE-IT (where the group holds a 49.9 per cent stake), ECEUROPE.COM (49.9 per cent) and DBC Online (40 per cent).
The most promising at present is RCHIVE-IT, which signed a marketing deal with Microsoft for one of its products and signed up Netstore for another. Both products are near to launch and the group is currently engaged in talks with a view to securing additional funding for the company.
The three companies will need a total of £1.5 million invested in them this year on top of the £1.5 million that has already been invested. City of London is ready to put up this cash if necessary, although Greenhalgh is confident that all three have enough potential to attract other investors.
News of the results sent the shares down 6p to 139p, valuing the group at £11.86 million.
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