Mar 2006 Financial News

GHL delivers EPS of $1.85 for 2005

Mar 17, 2006

In the preliminary release of the audited financial statements of Guardian Holdings Limited (GHL) for the year ended December 31st 2005, the company delivered a disappointing EPS of $1.85, down 38% from the previous year ($2.98). In spite of the lower earnings reported, the Directors have declared a final dividend of $0.40 payable to shareholders on record as at April 6th, 2006. This brings the total dividends for the 2005 financial year to $0.55 per share, which represents an increase of 10% over the dividends for 2004 ($0.50). The main difference in the performance of the company over the last two years is the performance of the local equities market which in 2004 contributed significantly in the form of mark-to-market gains, however in 2005 there was a significant contraction of share prices which translated into a diminished contribution of the Group’s equity portfolio.

In the current climate of low investor confidence in the local market, these less than stellar results may place downward pressure on the share price. However, we maintain our confidence in the long run potential of this entity and see the current scenario as creating opportunities for the bargain hunting investor. The series of events which combined for the overall falling results are not expected to be permanent factors, and as such, when these factors turn to positive influences, the story of the GHL share price may well show a positive ending.

Investors with a long term focus may derive little benefit from panic selling, whilst new investors would find that monitoring this share price gives the opportunity to acquire a valuable investment at a relatively cheap price. At the current price of $24.50, the shares of GHL are trading at a P/E multiple of 13.24, which is within the traditional trading range for GHL.