Irongate posts first-half loss of $13.9M on revaluations, loan provisions

Tuesday 30th November 2010

Irongate Property, one of the units of the St Laurence group that escaped receivership, posted a first-half loss, which it attributed to the cost of property sales, revaluations and loan provisions.

The net loss was $13.9 million in the six months ended September 30, from a loss of $28.2 million a year earlier, the company said in a statement. Net rental income fell to $3.7 million from $6.5 million.

The company sold $36.9 million of property assets in the first half, using most of the proceeds to pay debt. Borrowings were $133 million at September 30, down from $156 million in March, and amount to 68% of total assets. Bank debt rose to $87.2 million from $81.6million.

Loan provisions were $4.6 million and the value of the property portfolio was reduced by $4.7 million, or 3.8%.

The company said $50 million of bonds are due to be repaid in May 2011 and “in the current environment a level of uncertainty still exists” about its ability to make the payment. Valuation losses and provisions as at September 30 had caused it to breach two trust deed ratios and the company is seeking a temporary waiver.

"The property market has continued, as expected, to be challenging," said general manager Chris Minty. "Actively managing the company's development projects in order to progress them to a stage where we can sell at an optimal price continues to be our primary strategy for meeting our objective of repaying bond holders."

BusinessDesk.co.nz

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