Pyne Gould Corp makes slightly lower profit

The Christchurch-based company today posted an audited net profit after tax of $13.2 million, compared with $15.5 million in the previous June year.

However, the company said abnormals had to be taken into account, including a $2.6 million gain from accounting changes, and one-off restructuring costs of $1.8 million.

An accounting change had also boosted last year's surplus by $1 million.

After goodwill amortisation, Pyne Gould Corporation (PGC) said its net surplus was $3.8 million compared with $2.2 million last year.

The company's cash flow had improved to $5.82 million deficit compared with a loss of $57.1 million in the previous year.

PGC chairman Sam Maling said the group's subsidiaries had turned on a mixed performance.

While the rural servicing division performed strongly, financial services -- the group's fastest growing section in the last decade -- had suffered some disppointing results.

PGC's finance firms and its trustee business earned PGC a net surplus of $9.8 million compared with $10.7 million in 2001.

Marac and Nissan Finance had achieved record net profits but Allied Finance and Perpetual Trust were below expectations.

Immediately after the balance date, Perpetual had bought a half stake in the country's third largest mortgage broker, Mortgage Express and entered into an alliance with real estate agency Harcourts to provide wealth management products.

Mr Maling said cost cutting would help tackle the finance division's problems, with all the company's finance businesses save Nissan Finance coming under the Marac brand this year.

Meanwhile, PGC's rural services division was helped along by the merger of its 56 percent owned Pyne Gould Guinness and Reid Farmers, which would save costs of more than $3 million a year.

The company said direct comparison were difficult because of the merger but rural services had made a net surplus of $8 million, compared to 9.4 million the previous year.

Last week PGG posted a net after tax profit of $12.4 million for the full year ending June 6.

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