Pyne Gould lifts profit forecast

Pyne Gould Corporation chief executive Jeff Greenslade. Photo / Dean Purcell

Pyne Gould Corporation is forecasting a full year net profit of about $22 million, with a strong contribution from finance services arm Marac's vehicle financing operations.

The new forecast profit would be around 5 per cent ahead of the net profit of $20.9m previously expected, the company said today.

The latest forecast was based on net operating income about $17m above the amount previously expected for the year to June 30.

Net operating income reflected the underlying strength of its core operating businesses, Pyne Gould said.

Strong contributions came from Marac's vehicle finance operations as well as Perpetual Asset Management and Torchlight, following initiatives to improve and drive performance.

Also, a strategic alliance with the New Zealand Automobile Association and the purchase of GMAC NZ's retail motor vehicle finance book, both executed during the year, added to operating income as well as offering significant growth potential.

The company's performance would be offset by higher than expected asset impairment expenses of about $17.5m above the amount forecast, Pyne Gould said.

That largely related to property assets, a sector of the market it was getting out of.

Progress has been made in realising those assets in a commercial and considered way but the property sector remains difficult.

Impairment expenses included the one-off cost relating to an unauthorised loan advised earlier in the year, the company said.

Standard & Poor's had been advised of this preliminary result and confirmed Marac's credit rating of BB+ and had revised its outlook to stable from negative.

Pyne Gould's annual results are to be published on August 26. Along with Marac, the company's activities included trustee services through Perpetual Trust, and funds management through Perpetual Asset Management. It also has an 18.3 per cent holding in rural services company PGG Wrightson.

Pyne Gould shares closed at 41c on Friday, having ranged between $1.10 and 36.7c in the past year.

- NZPA