IRG made profit but write downs could have impact

Investment group IRG says it made an unaudited full year profit from operations of about $175,000, but the result is provisional and could be adversely affected by write downs in the carrying value of assets.

IRG chairman William Birch today said that write downs might need to be made as a result of the normal year end review now under way.

It had been a difficult year, with net cash from operations between positive $15,000 and negative $50,000 per month, depending on trading volumes each month, Sir William said.

IRG had borrowed about $120,000 on an unsecured basis from managing director Brent King to help with outgoings, and anticipated it might seek further support from him and other sources in the short term.

During the year to the end of March, IRG repaid $575,000 of principal off a term loan, and was talking to its bankers, as the company would like to reduce the amount of the principal repayments it was required to make.

IRG was also discussing its financial ratios with the bank, since it had little head room in its interest cover ratio, Sir William said.

"However, we are presently still complying with all financial ratios in our bank documents."

Mr King said the company was reviewing options to improve trading performance, including delisting of shares to reduce costs, acquiring additional businesses to increase size and reducing overhead allocation, and capital raising to reduce debt.

The business was growing and there were positive signs, but the trading environment was tough.

"We have seen growth in the circulation numbers of the media products, and the funds under management and funds under advice have both increased during the year."