Moving back to profitability
The last quarter of 2010 showed significant improvements in Acta's operations. By the end of 2010, Acta's clients have invested NOK 7.3 billion through the portfolio account, which makes the new business model a profitable success. Further, real estate companies owned by Acta's clients sold 11,100 apartments in Sweden, making it the largest real estate transaction in Sweden last year. The selling price is slightly above 7 billion Swedish kroner, securing a profit of approximately 1.3 billion Swedish kroner to Acta's clients.
The portfolio account success continues
Gross subscriptions ended at approximately NOK 1 billion in the quarter. Acta's main focus, especially for the Swedish organization, has been on informing and advising clients about the advantages the portfolio account implies for active clients. By the end of 2010, Acta's clients have invested 23 per cent of their equity through the portfolio account. These figures imply more than NOK 75 million in increased annual recurring revenues for Acta.
- The repositioning of Acta with the introduction of the portfolio account has been a success. With more than NOK 7.3 billion placed in the portfolio account during half a year, we have laid the foundation for reaching our ambitions to have 50 per cent of clients' equity invested through the portfolio account during 2012, and 75 per cent by 2014, says Geir Inge Solberg, CEO of the Acta Group.
Sweden's largest real estate transaction
In December 2010 it was announced that a large portfolio of real estate rentals in Sweden, consisting of approximately 11,100 apartments which were owned by Acta's clients, were sold to Willhem AB. Despite the financial crisis, the investments, which were launched in 2003, have yielded very good returns. Acta's clients have realized a profit of approximately SEK 1.3 billion, or returns between 85 and 93 per cent, depending on the client's location in Norway or Sweden, respectively. Acta Markets has, together with others, been a financial advisor in the transaction.
- Compared with similar investments in real estates in the same period, we are proud to present annual returns of 11 to 12 per cent to our clients. We expect many of our satisfied clients to reinvest part of the equity they now receive in other products offered by us, says Solberg.
Acta going forward
Acta will be active with respect to providing clients with first class advisory services, combined with a focus on informing and advising clients about the portfolio account concept. As recurring revenues continue to increase, which makes Acta less dependent on transaction-related revenues, the operational risk for Acta going forward is significantly reduced. Acta has ambitions of reaching the Group's new strategic goal, which is to have recurring revenues to cover both activity-based and fixed costs on an annual basis in 2011.
Highlights in the 4th quarter 2010
* Profitable new business model successful
* NOK 7.3 billion placed in the portfolio account as of year-end 2010
* Recurring revenues of NOK 86 million, compared with NOK 72 million in the corresponding quarter of 2009
* Total recurring revenues in 2010 were NOK 295 million, and, for the first time, Acta reached its strategic goal to have recurring revenues to cover fixed costs for the full year.
* Operating earnings of NOK 1 million, compared with NOK -9 million in the same period of 2009. Operating earnings for 2010 ended at NOK -27 million.
* Gross subscriptions of NOK 970 million, compared with NOK 1,032 million in the same period in 2009. Total gross subscriptions in 2010 were NOK 2,850 million.
* Major profits to clients from property sales
A complete English version of the interim report and the presentation of the 4th quarter of 2010 are attached on www.newsweb.no and on Acta's Investor Relations web pages www.acta.no.
Contact details:
Geir Inge Solberg, Chief Executive Officer, +47 908 78 043
Christian Tunge, Chief Financial Officer, +47 450 65 850
Rune Wangsmo, Public Relations Director, +47 995 41 507
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.