News blog
Water Hall Group/ Lloyds TSB
- BY: Andrew Hore |
- POSTED: 08/01/2009 |
Water Hall Group has lost £733,000 on an investment in Lloyds TSB shares.
The quarry operator invested £1.27m of its cash pile in Lloyds TSB shares in September 2008 in order to get a better return because the dividend payments were going to be higher than the interest it would have received.
The timing proved poor. Lloyds TSB has acquired HBoS and can’t pay dividends due to the terms of the government bail out of the banks.
The value of the company’s stake in Aim-quoted Petards has increased by £35,000 since the shares came back from suspension.
Water Hall is retaining both investments. It obviously hopes that the Lloyds TSB share price will recover. The investment is still worth nearly £500,000.
It is also looking for potential acquisitions and a number are under review.
Fourth quarter revenues for the quarry were in line with expectations but that was thanks to price cutting which attracted higher volumes but will have hurt margins.
The company will report its 2008 figures in April.
There was £4m of cash in the bank at the end of June 2008 plus an additional £1.29m of cash in escrow deposits held jointly with the Environment Agency. There are £2m of provisions for restoration of the company’s site to offset against that. Stripping out the Lloyds TSB investment the cash will have fallen to £2.7m.
Shares in Water Hall fell 0.5p to 4p each, which values the company at £2.27m. That is still below the cash in the bank. The underlying net asset value of the business should still be more than £3m.
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