Major changes form new basis for the Acta Group
- Operating earnings of NOK -104 million in the fourth quarter, and NOK -71 million for the full year 2011
- One-off costs and write-downs of NOK 98 million in the quarter, NOK 88 million without cash effect in the quarter
- Solid balance sheet with bank deposits of NOK 305 million
- The Group's ordinary operations were profitable with NOK 28 million for the financial year 2011, but earnings are strongly affected by one-off costs in the fourth quarter
- Resignation of the CEO
Even if the financial results are unacceptable, we are glad to see that the Acta Group's ordinary operations started to move back to satisfactory profitability during 2011. Operating earnings for the full year ended at NOK 28 million, adjusted for one-off costs of NOK 98 million attributable to year-end provisions, write-downs and expenditures. Provisions for reorganisation of the Norwegian and the Swedish organisation will be made in the first quarter of 2012 with approximately NOK 30 - 40 million. The ongoing reorganisation of the Acta Group will involve a consolidation of the Group's assets.
The reorganisation was accelerated by The Financial Supervisory Authority of Norway's notice of a possible withdrawal of Acta Asset Management’s license to conduct the current business. The Board of Acta Asset Management understands part of the criticism from the Financial Supervisory Authority and takes it very seriously. The Board disagrees, however, on certain points of the Authority’s factual and legal assessments. This will be addressed in a letter of reply to the FSA.
The Acta Group’s strategic focus on increasing recurring revenues has contributed strongly to the financial figures. Recurring revenues ended at all time high levels of NOK 93 million for the quarter and NOK 359 million for the full year, an increase of 22 per cent compared with the full year 2010 figures. Transaction revenues for the fourth quarter ended at NOK 32 million, and NOK 130 million for the year, approximately at the same level as last year.
The last quarter is, however, characterized by non-recurring items, provisions and write-downs mainly attributable to strategic projects and increased year-end provisions to meet potential future client compensations due to claims, including ongoing legal expenses. In the fourth quarter of 2011 the company Acta Kapitalforvaltning handed in its licenses to conduct investment services, and is no longer a securities company. Acta Kapitalforvaltning is now regarded as discontinued operations according to accounting policies, while provisions of NOK 64 million are made in the Group accounts.
The Board of Acta Holding has accepted the resignation of CEO Geir Inge Solberg. This follows the resignation of the Managing Director of Acta Asset Management. The Board of Acta Holding has decided to name Christian Tunge as acting CEO until a permanent CEO is in place. He will be supported by an active Chairman of the Board Alfred Ydstebø, in addition to Morten Bjørnsen, who will serve as the Chairman of the Board of the two subsidiaries Acta Finans AB and Acta Markets AS. Going forward, the Acta Group's client operations in Norway will be organised in Acta Markets, which will increase it's business and staff significantly. Acta Markets will create a full-service securities firm with highly skilled professionals in investment management, investment banking and advisory and brokerage services.
Operations in Sweden will, as previously, be handled by Acta Finans. Both the Norwegian and the Swedish company will change its name in order to reflect adaptations in the service concepts. Going forward, these companies will have an increased focus on personal advisory services for larger clients, making it easier to run the business in line with our, as well as external stakeholders’, high quality standards. At the same time, we will support all of our present clients by establishing new investment centers. New and easier concepts will be established to support all clients, even the smaller ones, in an even more effective manner. The proposed solution will in Acta’s opinion support the interest of all clients.
The strategic changes focus on profitable growth. The Group will reduce its annual costs from third quarter by approximately NOK 120 million through a combination of personnel and non-personnel related actions.
Although we expect assets under management to decrease to some extent, the emphasis on larger clients and on taking a greater part of the value chain will raise profit margins while at the same time reducing regulatory risk.
A complete English version of the interim report and the presentation of the 4th quarter of 2011 are attached on www.newsweb.no and on Acta's Investor Relations web pages www.acta.no .
Alfred Ydstebø, Chairman of the Board
Alfred Ydstebø, Chairman of the Board, +47 908 32 828
Jørgen Riiser, PR-advisor, +47 934 89 566
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.