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Lombard posts $439,000 loss on mortgage unit writedown

Thursday 27th November 2008

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Lombard Group, whose Finance & Investments division was put in receivership in April, posted a first-half loss, after writing down the value of its main trading unit.

The net loss was $439,000 in the six months ended September 30, from a loss of $3.2 million a year earlier, the company said in a statement. Revenue tumbled 93% to $1.18 million as the group stopped including the results for Lombard Finance & Investments.

"The nature of the financial markets in which Lombard and its subsidiaries operate in is at present challenging, with market confidence low," chief executive Michael Reeves said in a statement. "Lombard is continuing to review its operations on a regular basis with a view to rebuilding business levels once conditions allow."

The company won't pay a first-half dividend. It wrote down the value of its United Home Mortgages unit by $339,000 to $1.086 million, "given the current challenging climate."

Shares of Lombard last traded at 6 cents on October 8 and have tumbled 95% in the past year. In September, the company said it was considering whether to de-list from the NZX or be sold after its main operating unit was put in receivership by its trustee.

As part of a restructuring since the receivership, the company made almost all staff at Lombard Finance redundant, consolidated its remaining mortgage management businesses into one and moved to cheaper premises.

By Jonathan Underhill

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