KEY POINTS:
Pyne Gould Corporation (PGC) reported a half year net loss of $17 million due to one-off items and said its three businesses had solid operating results.
The result for the period to the end of December compared with a net profit of $22.1m a year earlier.
The underlying operating performances of all three businesses - Marac, Perpetual Trust and PGG Wrightson - were solid despite the challenging economic conditions, PGC said today.
In the second half of the year demand in Marac and Perpetual Trust was again expected to generally remain soft.
Operating profitability was expected below the levels reached in the second half of last year and much more in line with this first half interim result performance.
For the latest period, Marac had a net operating profit of $20.4m before tax and impaired asset expense, down from $22.8m last year. Finance receivables were only marginally below June 2008 levels at $1.4bn, PGC said.
After providing for higher impaired asset expense, net profit before tax was $11m compared to $21m last year.
The impaired asset expense - the write-off of bad debts plus provisions for doubtful debts less recoveries made - was now $9.3m, compared to $1.8m in the same period last year.
Total retail deposits of $794m at December, including $104m from Marac's five-year retail bond issued in July, was up from $557m at June 2008.
New funds flows had been at historical high levels following Marac being approved under the New Zealand Deposit Guarantee Scheme.
Reinvestment rates had been at the upper end of historical averages - 74 per cent in the December quarter, PGC said.
Latterly, the company re-commenced identifying sound lending opportunities from New Zealand businesses and individuals which meet credit criteria.
As previously notified, PGC put in place an underwriting facility of $25m to enable Marac to manage at risk property development loans.
At December 31, about half of the $25m was allocated against specific loans and the balance has been retained as an unallocated collective provision.
The $25m provision represented 9.5 per cent of the overall property development loan book of $260m at December 31.
Perpetual Trust's net operating profit before tax of $2.4m, was $300,000 down on last year, while revenue was 6 per cent down.
The operating businesses of PGG Wrightson had net operating profit before tax up 32 per cent to $22.1m.
Among factors affecting the overall result was the increased level of provisioning for impaired assets in Marac, and the $25m Marac underwrite provision.
The result was also affected by PGC's share of PGG Wrightson's losses arising from one-offs including the write-down to current market value of its investment in New Zealand Farming Services Uruguay.
An interim dividend of 5 cents per share was to be paid, down from 10cps a year ago.
- NZPA
