Capital régional et coopératif Desjardins announces a rise in share value
With commitments in 232 businesses, the Company is contributing to the creation and retention of 31,000 jobs in Québec
Montréal, August 19, 2010 – At the close of the first half of the year on June 30, 2010, Capital régional et coopératif Desjardins is announcing net income of $7.0 million compared with $6.9 million for the same period in 2009. Net assets have reached $967.7 million, up 6.8% compared with December 31, 2009.
As a result, per share value is now $9.80, rather than $9.73 as at December 31, 2009. The increase becomes effective at noon today. For information purposes, at the price of $9.80, shareholders who invested seven years ago obtain an annual after-tax return of approximately 9% taking into account the Québec income tax credit of 50% they have enjoyed.
Continuous support for Québec companies and cooperatives
As at June 30, 2010, Capital régional et coopératif Desjardins had commitments of $497.5 million in 232 companies, cooperatives and funds, contributing to the creation and retention of some 31,000 jobs across all regions of Québec.
Throughout the first half of the year, the Company continued its investments impacting the Québec economy activities with new disbursements of $29.8 million compared with $35.3 million for the corresponding period of 2009. In all, out of the 38 investments made, 15 were reinvestments in partner companies.
Commenting on the results, Chairman of the Board André Lachapelle stated, “Capital régional et coopératif Desjardins has actively pursued its mission, and activities in the first half of this year show the relevance of its support to Québec companies and cooperatives. Even stronger proof of that is the partnership we announced with the Caisse de dépôt et placement du Québec for a joint investment of $200 million for the creation of a new fund in support of the growth of Québec SMEs.”
The investment portfolios performed well
The portfolio of investments in Québec companies and cooperatives has enjoyed a solid current revenue base. Thanks to a more balanced asset allocation and the maturity of its portfolio, it produced a return of 2.6% at the end of the first half of the fiscal year compared with 1.6%, for the same period of 2009. Most business lines contributed to the results, in particular Major Investments and Company Buyout, spurred by the more favourable economic conditions of the first half of the year.
The other investments portfolio, composed mainly of bonds, also performed well, posting a return of 2.3% at the end of the first half of 2010 due to reduced market expectations of interest rate increases in the future. Favoured by narrower credit spreads, return was 3.1% for the same period in 2009.
Marie-Claude Boisvert, COO of Desjardins Venture Capital which is manager for Capital régional et coopératif Desjardins, remarked, “Of course, we’re satisfied with these results – not only are we profitable, but we can also fully carry out our mission and assist Québec companies in securing their succession. What’s more, we put a new face on our company transfer financing initiative. The announcement of the joint investment with the Québec government and the Fonds de solidarité de la FTQ to create the Fonds d’investissement pour la relève agricole is a key example of that. It gives us yet another tool to help ensure the sustainability of our farming enterprises.”
Shares in strong demand
During the first half of the year, capital subscriptions reached $109.7 million compared with $84.1 million for the same period of 2009. Share redemptions totalled $55 million at the close of the half year. Since November 2008 when the first shareholders completed their minimum statutory seven-year holding period, close to 39% of the shares eligible for redemption have been redeemed. Shareholders now number 112,113.
Shares from the 2010 issue, on sale since April 21, are still available throughout the Desjardins caisse network and, by investing, shareholders enjoy a Québec income tax credit of 50%. To date, over 55% of the target of $150 million for the issue has been raised.
About Capital régional et coopératif Desjardins
Founded in 2001, Capital régional et coopératif Desjardins is a publicly traded company managed by Desjardins Venture Capital. With over 112,000 shareholders, the Company contributes to Québec’s economic development while driving the growth of cooperatives and the resource regions. Capital régional et coopératif Desjardins currently supports more than 230 companies, cooperatives and funds in various industries spanning all Québec regions. (www.capitalregional.com)