Sir Brian Souter’s family investment vehicle recorded a loss of almost £100 million after the Stagecoach share price plummeted.
The co-founder of the Perth bus giant holds a substantial part of his wealth within Souter Investments Limited, including a 16% shareholding in Stagecoach.
Newly filed accounts for the year ending March 31 showed the investment group made a pre-tax loss of £95m, with tax and foreign currency losses taking the total deficit to £96.4m.
The decline in Stagecoach’s share price weighed on the investment fund, with the value of the bus firm’s shares in the portfolio more than halving from £133.5m to £60.7m within 12 months.
The Stagecoach share price, which was around 70p at the end of March, has since declined further to below 40p.
The investment company holds stakes in around 25 firms, with a typical investment of between £5m and £15m.
The value of the other investments also fell, from £339.3m in 2019 to £213.8m last year.
This partly reflected the disposal of a substantial stake in Alexander Dennis – the world’s largest producer of double decker buses – which was sold to a Canadian firm for £320m in May 2019.
The sale gave Souter Investments cash proceeds of £121m and the company’s cash at bank less borrowings rose during the year from £10.7m to £69.7m.
In the company accounts Sir Brian said: “The generation of new opportunities was again strong during the year, and we continue to be rigorous in our selection of investments.
“We continue to diversify our portfolio and retain a healthy appetite for unlisted investments.
“The results for the year were impacted significantly by the decline in the Stagecoach share price, together with decreases in value of other investments as at March 31 2020.
“However, longer term we expect to see recovery of these valuations due to the high quality of the investments, their strong management teams and the recovery in valuations/multiples since the year end.”
Souter Investments’ net assets fell from £416.8m in 2019 to £295.5m, a drop of £121.2m.
In December Souter Investments sold its controlling stake in property data business OneSearch Direct to Landmark Information Group.
The accounts are a stark contrast to the investment firm’s results from 2019 when it recorded profits of £80m.
Following the results, the businessman revealed he had given his charity shares then worth £109m.
It was thought to be the largest charitable donation by a Scot since Andrew Carnegie.
The donation was made to the Souter Charitable Trust, which he set up with his wife in 1992.
The trust supports projects engaged in the relief of human suffering in the UK and overseas – especially, but not exclusively, causes with a Christian emphasis and ethos.
Among the groups to benefit in the past are Christians Against Poverty, Youth for Christ, Mary’s Meals, Bethany Christian Trust and Chest Heart and Stroke Scotland.
At the time, Sir Brian said: “Given the excellent performance of Souter Investments, I have today gifted 28% of its shares to the Souter Charitable Trust. I estimate that the value of this shareholding is £109m.
“The Souter Charitable Trust has donated more than £98m to 13,000 worthwhile causes over the last 13 years and this gift will allow it to continue this important work.”
