Print Published 6th Oct 2017, 18:04

Tangent’s new owner declares £17.5m profit while trading at a loss

Portland Asset Management (UK), the vehicle established by Michael Green and his family to acquire Tangent Communications from its public shareholders last year, incurred an operating loss of £1.6 million in its first period of trading, but was able to report a post-tax profit of £17.4 million.

By a strange quirk of accountancy, Portland was permitted to include in its profit a paper gain of £19.3 million representing the amount by which the “fair” value of net assets acquired exceeded the price paid to acquire them.  In other words, the accounting treatment assumed that Portland bought Tangent on the cheap and that the “discount” may be recognised as an immediately realised profit – even though it was initially nothing more than a paper gain.