Pyne Gould posts profit of $10.1 million as impairments fall, reiterates FY target

Friday 26th February 2010

Pyne Gould, the finance and asset management company with aspirations to turn its Marac unit into a bank, reported a return to first-half profit as impairments tumbled.

Net income was $10.1 million in the six months ended December 31, from a loss of $17 million a year earlier, the company said in a statement today.

Operating income climbed to $49.6 million from $41 million.

The results are the first for Pyne Gould since its re-capitalisation, which saw it raise $273 million in new capital, strengthening its balance sheet and heralding the company’s entrance to the benchmark NZX 50 Index.

The company is splitting its business into three distinct and standalone units as it drives Marac toward a banking licence, which requires a solid track of earnings and a return to an investment grade credit rating.

“The interim result is satisfactory in difficult conditions,” chief executive Jeff Greenslade said. Pyne Gould “is confident that the plans to create a market leading niche bank and wealth management business are well on track.”

The company expects to meet its full-year earnings forecast of $20.9 million, it said. It won’t pay an interim dividend. Shares of Pyne Gould fell 2.2% to 44 cents and have fallen 10% in the past month.

Earnings at Marac slipped to $8.2 million from $10.1 million a year earlier, including a $3.3 million pretax provision for a previously announced loan irregularity.

Its Perpetual Group asset management unit contributed $3.7 million, up from $2.4 million in the first half of the previous year.

PGG Wrightson, of which Pyne Gould now owns 18.3%, provided $400,000 in the latest six months, including the dilution affect of Agria taking a cornerstone holding in Wrightson.

In the year-earlier period, Pyne Gould’s share of Wrightson’s losses was $21.4 million. Impairment charges at Marac rose to $10.8 million from $9.3 million, mainly reflecting property and commercial assets, while the charge on its consumer book shrank to $1.3 million from $2.4 million.

Having overseen last year’s $273 million recapitalization, chairman Sam Maling will step down at the company’s shareholder meeting in March, to be replaced by Bruce Irvine.

Businesswire.co.nz

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