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Dorchester narrows loss, forecasts FY profit helped by EC Credit

Dorchester Pacific, which avoided failure in 2010 by convincing investors to accept a debt-for-equity swap, narrowed its first-half loss and reiterated its target for a full-year profit, helped by earnings from recently acquired debt collector EC Credit Control.

The shares climbed 8% to 27 cents on the NZX, bringing their gain this year to about 207%. The net loss was $87,000 in the six months ended September 30, from a loss of $993,000 a year earlier, the Auckland-based company says in a statement. Operating revenue rose 26% to $5.4 million.

Dorchester has added EC Credit to its existing insurance and finance businesses, which both lifted income in the first half.

The company first flagged a full-year profit of at least $1 million when it announced the acquisition in September. Profit for the 2014 year would be $4 million to $5 million, it said today.

The company's turnaround includes the early buyback of $15 million of June 2013 notes after it secured an equivalent amount of bank funding.

It anticipates a jump in shareholders' funds in 2013 when 150 million options are exercisable next June at 12.5 cents apiece.

(BusinessDesk)