Audit shows smaller loss by Sth Canterbury Finance

South Canterbury Finance chief executive Lachie McLeod (l) and company founder and chairman Allan Hubbard.

The audit of South Canterbury Finance's annual results, now ready after taking longer than expected, shows a smaller net loss than reported in earlier preliminary figures.

South Canterbury today said its audited net loss for the year to the end of June was $50.4 million, compared to the preliminary unaudited loss of $69m announced in late August.

The reduction in the reported loss was mostly due to non-monetary fair value adjustments.

Loan losses and provisions against impaired loans were at a similar level to those included in the company's preliminary announcement, South Canterbury said.

Completion of the year end audited financial statements took longer than earlier expected as the company's auditor was peer reviewed following a request by the New Zealand Institute of Chartered Accountants.

South Canterbury chairman Allan Hubbard said the result for the past year was disappointing in a challenging market.

While the group had to take account of significant losses and provisions on loans and investments totaling $122.9m before tax, the underlying trading profit of $32.3m was encouraging.

Underlying trading profit is the net profit before tax excluding impairments on loan advances, gains and losses on investments and intangible assets, and excluding foreign exchange gains and losses.

Hubbard said the completion of the audited financial statements had been a key step in the company's restructuring plans.

Talks seeking a favourable resolution continued with investors who held notes issued in a US$100m ($140.6m) private placement, South Canterbury said.

The company is in breach of certain covenants under the notes, meaning the noteholders have the right by majority vote to require repayment of the notes immediately.

- NZPA