Pyne Gould FY profit more than halves as asset sales end, mulls restarting dividend

Friday 29th August 2014

Pyne Gould Corp, the Guernsey-based asset management firm controlled by George Kerr, more than halved its annual profit after completing its asset sale programme and is eyeing a return to paying dividends.

Net profit fell to $20.1 million, or 9.5 cents per share, in the 12 months ended June 30 from $45.2 million, or 20.5 cents, a year earlier, the company said in a statement. That was in line with last week's guidance, and included a $22.5 million gain on the sale of its financial services units in the latest year. It reported an operating loss of $142,000 from operating income of $8.1 million, compared to a profit of $20.3 million on revenue of $42.5 million in 2013.

Managing director Kerr said Pyne Gould is considering restoring a policy of regular dividends within the next year, with the firm "well ahead of its restructuring objectives and is highly confident in both the financial strength and strategic director of the company." It will provide an update in the annual report, which will be released by the end of September.

That's almost three years after Kerr said the firm was no longer a high-dividend stock and needed owners with a long-term view and the ability to inject more capital in his pitch to take over the company after its exit from Marac Finance. At the time, Kerr said "PGC is now a company more likely to re-invest its earnings in its assets with a patient seven years and beyond investment horizon."

Last year, chairman Bryan Mogridge told shareholders the company is seeking to deliver compound growth north of 15 percent over the medium to long term, meaning it will deliver “lumpy results” and has a policy of not providing market guidance.

Pyne Gould lifted net tangible assets 16 percent to 74 cents in the year.

The firm is reviewing its timetable for a London listing and will make an announcement when it publishes the annual report.

Pyne Gould increased its stake in Torchlight Fund LP to $59 million and $33 million of co-investments, and held assets of $159.8 million as at June 30, compared to $151.8 million a year earlier.

Torchlight, which has targeted distressed assets, contributed $5.8 million before $2.7 million of foreign exchange accounting adjustments. The Torchlight fund acquired almost 100 percent of the assets of residential land investor Residential Communities in the year, and is a cornerstone investor in ASX-listed Lantern Hotel Group. It also holds an 11 percent stake in UK newspaper group Local World.

Pyne Gould has a 27 percent stake in Equity Partners Infrastructure Co No 1, which owns 17 percent of UK motorway service owner and operator Moto.

The shares were unchanged at 45 cents, and have slipped 6.3 percent this year, lagging a 7.2 percent increase in the NZX All Index over the same period.

BusinessDesk.co.nz

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