Legless Austock profit smashed by discontinued operations

Diversified financial stock Austock Group's decision to list on the stock exchange in early 2008 couldn't have been more ill timed, with the share price savaged to less than a quarter of its listing price.

Financial year 2008 net profit was just $0.1 million, down from $11.1 million in the corresponding year, due to huge losses in discontinued operations and impairment changes.

A $5.3 million loss was booked on the discontinuation of property operations in the United States, which when broken down included a $2.5 million impairment provision for costs incurred that had previously been capitalised, $1.9 million in operating costs for the year and a $0.9 million provision for business closure costs still to be incurred.

Additionally, a $1.6 million impairment was taken for the investment in Australia Pacific Exchange, plus a $1.1 million hit for two legacy investments in listed entities.

These were a holding in shares in ABC Learning Centres that were given to the group in lieu of director's fees, and a holding of units in API Fund that the group acquired as part of the acquisition of Ceramic Funds Management Limited in 2007.

Total revenue increased 22 per cent to $72 million, with a one cent unfranked dividend declared, bringing the year total to three cents.

No shares changed hands yesterday, last trading just above yearly lows at 50 cents. Year highs are $2.25, with the current market capitalisation $60 million.