Complectus puts off IPO as US presidential election stokes market volatility

Wednesday 16th November 2016

Complectus, which owns the Perpetual Guardian supervisory business, shelved plans for an initial public offering with volatility in already uncertain markets heightened by this month's US presidential election.

The Auckland-based company had planned to list in early December raising up to $150 million in a dual-listing on the NZX and ASX but has decided to put that off until markets settle. The S&P/NZX 50 Index has fallen as much as 12 percent from a peak in early September, with the prospective presidency of Donald Trump driving up bond yields and taking the shine off high-yielding markets such as New Zealand.

"While the initial feedback from analysts and investors has been positive, we feel that the appropriate course of action is to postpone the IPO until markets have settled," founder Andrew Barnes said in a statement. "We are mindful that market conditions can affect the listing process and don't want to proceed in a window that creates uncertainty for investors and the company alike."

Perpetual Guardian was the brainchild of Barnes, who began buying trustee firms in 2013 with the acquisition of Perpetual Trust and later went on to buy Guardian Trust. Since then the group has purchased Covenant Trustee Services, Foundation Corporate Trust and New Zealand Trustee Services and now oversees more than $130 billion of assets.

This week Perpetual Guardian settled a dispute with the receivers of failed lender Capital + Merchant, claiming Perpetual Trust breached its duty of care. The dispute predated Complectus' acquisition of Perpetual Trust, and the payout would be covered by its insurers.

In September, Complectus owner Bath Street agreed to drop court proceedings with Perpetual vendor Pyne Gould Corp over the sale. The terms are yet to be finalised.

Accounts filed with the Companies Office show Perpetual Trust reported a loss of $331,000 on revenue of $4.9 million in the 12 months ended June 30, compared to a profit of $59,000 on sales of $6.4 million. The unit paid a service fee to Guardian Trust of $5.3 million in 2016, compared to $5.6 million in 2015.

Separately, Guardian Trust's accounts show it generated a profit of $8.8 million on revenue of $43.6 million in the year ended June 30, largely unchanged from a profit of $8.8 million on sales of $44.2 million in 2015.

BusinessDesk.co.nz

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