Former Canterbury stock & station agent Pyne Gould Corp Ltd – still listed on the NZX although its business is now in the UK & Australia and it wants to be listed in London – reported a financial turnaround yesterday based mostly on non-cash movements in foreign currency reserves.
The company got another ticking off from NZX Regulation for filing its annual results late (by a day), but issued a more positive report, although it remains embroiled in litigation.
Managing director George Kerr said it turned from a total comprehensive loss of £22.22 million for the June 2015 year to total comprehensive income of £8.78 million this year. That was after an £8.93 million unrealised gain from the foreign exchange translation of foreign associates & subsidiaries, compared to a £15.427 million unrealised loss from foreign exchange translations in 2015.
At the operating level, Pyne Gould recorded a £7000 net loss after tax (a £6.789 million net loss in 2015). Its basic & diluted loss/share went from 2.37p to 0.82p. After allowing for non-controlling interests, the company said net tangible assets/share rose from 26.61p to 26.84p.
Mr Kerr said in his report: “PGC remains focused on patiently executing on its long-term strategy of exiting non-core assets and building a long-term business from distressed assets. The exit of non-core assets is largely complete. The material residual receivable arose from the exit from Perpetual Trust Ltd. This receivable has been independently valued at $NZ20.88 million.”
The core strategy is to commit to the growth of the Torchlight Fund LP, but that’s changed since last year too with the sale of one of its 3 main investments, an 11% stake in UK newspaper group Local World, acquired in 2012 for £7.5 million and sold last year for 4 times the price. Mr Kerr said Pyne Gould transferred the cash consideration from the sale to Torchlight Fund LP and into Australian dollars, which had since risen 20% against the pound.
The other 2 main investments are Melbourne-based residential land investor & developer Residential Communities Ltd, which had a landbank of about 6000 sites in 17 projects and develops & sells about 10%/year, and a cornerstone shareholding in ASX-listed Lantern Hotel Group, a Sydney-based freehold hotel group with net assets of more than $A100 million. Torchlight supports Lantern’s strategy of creating long-term value by acquiring & operating freehold pubs and buying back shares below net asset value.
The most significant event of the year for Residential Communities was in progressing a plan change at Jacks Point in Queenstown: “The first stage of this project was recently released to the market, with all 100 sections selling in line with list prices on the day of release. The near-term focus within RCL remains on continuing to progress this project.”
As for the “large & complex litigations” PGC & subsidiaries have been involved in, Mr Kerr said: “This is an unwelcome, but necessary, requirement of defending the balance sheet of PGC. We devote considerable resources to this part of the business and fully expect our position to be validated by the courts in all cases.”
Attribution: Company release.