Pyne Gould back in black as Queenstown property development comes on stream

Wednesday 1st March 2017

Pyne Gould Corp, the financial services firm controlled by managing director George Kerr, returned to profit in the first-half as its Queenstown property development came to market in the tail-end of 2016.

The NZX-listed, Guernsey, UK-based company posted a profit of 2.9 million British pounds, or 1.09 pence per share, in the six months ended Dec. 31, turning around a loss of 1.5 million pounds, or 0.51 pence, a year earlier, it said in a statement released to the stock exchange after trading closed yesterday. That included 7.5 million of net income from Pyne Gould's land developments and resales.

Pyne Gould has targeted distressed assets through its Torchlight Fund LP, a division it set up in 2009 to house toxic Marac Finance property loans that needed a longer timeframe for value to be realised as part of the recapitalisation of the finance company. Those investments include a cornerstone stake in ASX-listed Lantern Hotel Group and 100 percent of residential land investor RCL, which has a land-bank of 4,000 sites across Australia and New Zealand.

RCL's Hanley Downs development near Queenstown was rezoned in the third quarter of 2016 "and has begun the process of unlocking cash value over time" with the first stages of the project "released to the market in the latter part of 2016" and 175 sections selling in line with list prices, Pyne Gould said. "The near-term focus within RCL remains on continuing to progress this project."

The company said Torchlight was valued at A$381.8 million, up from A$283.7 million by valuer Duff & Phelps, although that wouldn't show up in Pyne Gould's accounts which adopted a different methodology.

The fund is subject to "a number of large and complex litigations" including a dispute with minority partners wanting to wind up the fund early, and Pyne Gould expects to provide an update "in the near future".

The shares last traded at 23.5 cents, and are down 4.1 percent over the past 12 months.

Full accounts for the half will be released by the end of March.

BusinessDesk.co.nz

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