Markets rides on 19% Ascot stake trade

Tuesday, 13 September 2011 00:38 -     - {{hitsCtrl.values.hits}}

The Colombo bourse saw heavy play on Ascot Holdings, with around 19% stake of the company trading propelling the share price to a new record, only to be trapped in the SEC’s price band from today.

Around 1.5 million shares of Ascot changed hands via 1,061 trades for Rs. 252.6 million. The share hit an all-time high of Rs. 192 before closing at Rs. 178.30, up by Rs. 42.20 or 31% from Friday’s close. Of the quantity traded, there were two crossings of 154,000 shares at Rs. 150 each and another 150,000 at Rs. 160 each.

High net worth investors were at play via crossings whilst retailers were collecting smaller quantities. Divasa Equity had bought a block of 150,000 shares from Esna Holdings of Eshana de Silva. High networth investor Rifky Badurdeen was speculated to have been on the buying side as well.  The forerunner for the play on Ascot happened on Friday when biggest individual shareholder Nimal Perera shed 500,000 shares at Rs. 130 each, nearly Rs. 50 lower than yesterday’s closing. At end June, Nimal held 1.4 million shares or a 17.6% stake in Ascot.

Axis Financial Services is the majority shareholder of Ascot with a 37.5% stake. Commanding 7.98 million shares in issue, the public holding of the company is 45.86%.

Before closing up Rs. 11.20, last week Ascot hit a new high of Rs. 155, beating its previous best of Rs. 135. The previous week it rose by Rs. 12.60.

Largely on speculation, whilst some on future earnings upside, many think the Ascot share will rise further.

However, following sharp increase, Ascot was captured under the SEC price band and will be subject to a maximum gain of 10% for the next five days.

As at June 2011, Group earnings per share was a negative 29 cents as against a positive 60 cents a year earlier. Net book value per share was Rs. 73.36 at Group level and Rs. 68.72 at Company level at end June.

In the quarter ended 30 June 2011, Group loss was Rs. 2.3 million, as against a profit of Rs. 4.76 million, whilst for the Company the loss was Rs. 4.1 million, in comparison to Rs. 4.8 million. Revenues were down by 14% to Rs. 22.3 million and 58% to Rs. 6.3 million for the Group and Company respectively.

During the first quarter of FY12 the company purchased 64.5% of the minority shareholding of Ascot Developments (Pvt) Ltd., for a consideration of Rs. 105.35 million following which the company holds 85.8% of Ascot Developments Ltd.

A further investment of Rs. 15 million was made in L&A Quarries Ltd., a subsidiary company incorporated for construction and managing a quarry at Nawagamuwa/Ranala. Commercial operation is expected in September 2011. The company holds 50% shareholding with management control.

The Board of Directors of Ascot Holdings comprises Vijaya Malalasekera, Rohan Iriyagolle, Niroshan Gunaratne, Nissanka Arjuna de Mel, Chanaka de Silva and Denzil Gunaratne.