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Another year of profit for EGFL

Natasha Beckles

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The Enterprise Growth Fund Limited (EGFL) recorded a seventh consecutive year of profitability in 2010, albeit at a reduced level when compared to 2009.
According to the fund’s annual report for the year ended December 31, 2010, profit declined from $1.6 million in 2009 to $784 097 last year.
Chairman Terrence Thornhill said the decline could be attributed to three factors.
“Firstly, the management fees earned in 2009 on the administration of the Tourism Industry Relief Fund would have been non-existent this year as this was a one-off event.”
Also peculiar to 2009 were the redemption of two sizeable investments that generated substantial capital gains and the recovery of non-accrual loan interest.
Furthermore, Thornhill said the decision to amortize the full cost of developing a loan and treasury management system in keeping with standard industry practice led to a significant charge to earnings.
Chief executive officer Timothy Simmons told BARBADOS BUSINESS AUTHORITY that excluding these one-off events, profit for 2010 was only slightly below that of 2009.
Meanwhile, Thornhill noted that the appetite for loans continued to be anaemic in light of the protracted economic slowdown.
“Following loan and equity approvals totalling $7.87 million in 2008 and adjusted approvals of $4.52 million in 2009, EGFL and the funds under management sanctioned requests of $5.07 million in 2010,” he said.
Total disbursements by EGFL and its funds which included loans, equity and grants were $17.94 million in 2010 which was below the comparative figure of $23.83 million for 2009.
Simmons said the impact of the economic recession was manifested in the fact that a number of clients were challenged to meet their debt service payments.
“A number of them have asked for restructuring [or] moratoria on the principal repayments [and] some asked that the length of the loan be extended to reduce the instalment payment.
“To the length that we could accommodate them, we have accommodated them.
“In some instances it has helped tremendously with the cash flow of clients to the extent that loans that would’ve been non-current have become current,” he said.