Article – BusinessDesk
Feb. 29 (BusinessDesk) – Pyne Gould Corp, which has been taken over by majority shareholders George Kerr and Baker Street Capital, narrowed its first-half loss under a radically different structure from a year earlier, but has wavered on guidance …
New look Pyne Gould narrows 1H loss, wavers on 2012 guidance
By Paul McBeth
Feb. 29 (BusinessDesk) – Pyne Gould Corp, which has been taken over by majority shareholders George Kerr and Baker Street Capital, narrowed its first-half loss under a radically different structure from a year earlier, but has wavered on guidance for the annual result.
The Christchurch-based company posted a net loss of $27.1 million, or 13 cents per share, in the six months ended Dec. 31, smaller than the $35.7 million loss a year earlier. Revenue jumped 47 percent to $17.4 million, underpinning a trading profit of $2.7 million.
“The trading profit is anticipated to improve from its current level but not double,” chairman Bryan Mogridge said in a statement. “It is too early to give any solid indication of a final result” due to accounting adjustments, and unrealised movements in the fair value of assets, he said.
Pyne Gould is still under a takeover offer from Kerr and Baker Street, who want to take the company private and have extended their bid until the end of March. They currently hold 70.5 percent, and have waived the minimum 90 percent target they initially set in their 37-cents-a-share offer.
The takeover bid emerged after Marac Finance, previously its major asset, was carved out and placed in the Heartland New Zealand merger, which plans to seek a banking licence.
The company’s wealth management unit, consisting of Perpetual Group and Australian research firm van Eyk, made a loss of $350,000 in the period, and Mogridge said that performance wasn’t “satisfactory.”
Its real assets, which include a stake in the Equity Partners Infrastructure Co, a holding in the Torchlight Fund No 1 LP and its management contract, made a profit of $3.4 million, and Pyne Gold’s board has increased the capital available to Torchlight to “seek modest investments beyond the Torchlight fund.”
In the period, Torchlight made several new investments, including a $7.5 million stake in an overseas equities fund.
“The nature of the investments and commercial sensitivity precludes comment, except to say at this early stage their potential is considered promising,” Mogridge said.
Pyne Gould said it intends to repay its existing bank facility when it comes due in May and won’t hold any more debt at the holding company level.
The shares fell 2.7 percent to 36 cents in trading today, valuing the company at $78 million by market capitalisation.