Pyne Gould Corp Ltd confessed on Thursday that it still hadn’t received $22 million of the $26.6 million it reported as net profit in its 2014 accounts.
The $22 million was always a conditional payment and was recognised as such in notes to the accounts. But that recognition stayed in the notes. On the income statement, it was registered as a gain on disposal of discontinued operations.
Receipt of the money depended on the purchasers of Perpetual Trust Ltd, Bath Street Capital Ltd & Andrew Barnes, listing the shares of a newly incorporated company on the NZX main board. The listing didn’t happen.
Pyne Gould managing director George Kerr told the NZX on Thursday: “As at the date of this announcement, no money has been received. PGC has made an inquiry as to the likely timing of payment, and has now received a response that does not indicate any particular timeframe for receipt of the consideration amount. The outstanding amount and its status will be pursued through the appropriate channels.”
While Mr Kerr said the $22 million was classified as a receivable in the June 2014 accounts, its appearance in the income statement as a gain on disposal turned it into real dollars.
“Given the current status of the outstanding amount” – or, in reality, what was always its true status, conditional possible income – Mr Kerr said that, “as at today’s date, it will be reclassified in PGC’s accounts to 31 December 2014 (due for market release by the end of February) as ‘an available for sale financial asset’. As such it will be measured at fair value by an independent valuer. The impact of this on PGC’s net profit after tax for the year to 30 June 2014 will be reported once this valuation is complete.”
Pyne Gould announced the conditional sale of Perpetual in December 2013 and completed it in January 2014. The deal included an ability for Pyne Gould to benefit by up to 40% of the value created from future corporate events relating to Perpetual.
Attribution: Company release.