Canadian Underwriter

Vector makes half year rebound, curbs debt costs

September 4, 2002   by Canadian Underwriter

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Broker network consolidator Vector Intermediaries Inc. (TSX: VTE) disclosed a net profit of $307,378 for the second quarter of this year compared with the $139,701 loss reported for the same period the year previous. The company’s net earnings for the first six months of this year came in at $91,916 against the $710,761 loss made at the 2001 half year.
Vector completed the sale of its Atlantic Canada operations in May, which resulted in a gain of about $1.7 million. Net earnings for the latest quarter, including the gain made from the aforementioned sale, amounted to $1.974 million, while profit for the six month period came in at $1.758 million. The company paid off approximately $4 million in long-term debt in July.
A statement issued by Vector says that the company will continue to issue shares in lieu of interest owing on outstanding subordinated debenture-based debt instruments. The company’s number of common shares in issue had risen to 54 million by the end of June this year compared with 27.7 million in issue a year before. As a result, the directors note that comparing earnings per share at this stage is meaningless due to the dilution effect. "Management continues to look for ways to improve the unwieldy capital structure and is optimistic that there will be something to report before yearend."

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