PGC posts profit rise, Marac stands out

Pyne Gould Corp today posted a 16 per cent rise in annual profit, buoyed by strong growth in its motor vehicle finance division, but is wary of a slowdown this year.

The Christchurch-based financial services firm, which owns Marac Finance Ltd and Perpetual Trust and has a 55 per cent stake in Pyne Gould Guinness, reported a net after tax profit of $30.2 million for the year to June 30.

The result included $1.3m in abnormals from the sale of surplus properties by Pyne Gould Guinness.

Marac was the standout performer, with a net after tax surplus of $23.1m, up 23 per cent, as it moved to position itself at the high quality end of motor vehicle finance.

But PGC warned of less favourable conditions for Marac in the coming year, particularly in the consumer market and property development.

Perpetual Trust recorded a 7 per cent increase in net profit to $2.2m, while Pyne Gould Guinness contributed a net profit of $10.7m, down on the $11.5m reported a year earlier.

Prospects for the rural services division were positive, with commodity prices and activity levels remaining strong to date.

"We are cautiously optimistic for all of our businesses into the year ahead, notwithstanding some less certain market conditions in a slowing economy," chairman Sam Maling said.

PGC is backing a planned merger of Pyne Gould Guinness with its rural services rival Wrightson Ltd. Under the plan, which is subject to regulatory approval, PGC will hold 22 per cent of the combined group.

Shareholders will vote on the proposal early next month.

PGC shares traded down 5c at $5.05 on the news. The firm will pay a final dividend of 11 cents per share, plus a special dividend of 1cps from the Pyne Gould Guinness business.

- NZPA