Brierley's Mercantile first-half profit falls 34% on loan impairment, stock payments, tax

Tuesday 1st March 2016

Mercantile Investments, the latest investment vehicle of veteran corporate raider Ron Brierley, posted a 34 percent drop in first-half profit as share payments, loan impairments and tax ate into dividend returns and an uplift in its stock portfolio.

Net profit after minorities fell to A$583,000 in the six months ended Dec. 31, from A$880,000 a year earlier, the Sydney-based company said in a statement. The latest period saw Mercantile book an A$853,000 impairment charge on loans and A$164,000 of share-based payments, contributing to expenses more than trebling to A$1.8 million.

Revenue more than trebled to A$3.1 million, with dividends, capital return and distribution income jumping by about 100 percent to A$1.7 million, and the firm's investment portfolio booking a A$1.4 million uplift in its unrealised fair value. The bottom line was also hit by an A$837,000 tax expense.

Mercantile restated its year-earlier accounts after understating profit and cash flow in the 2014 period, and overstating total comprehensive income.

Last week Mercantile launched a takeover bid for NZX-listed Kirkcaldie & Stains at $2.75 a share, less than the $3.18 to $3.67 range placed on the residual assets of what was once Wellington's premier upmarket department store.

The investment firm acquired 72 percent of ASX-listed Ask Funding during the six-month period under review, and held financial assets worth A$45.6 million as at Dec. 31, compared to A$35.7 million six months earlier.

Mercantile's net asset value increased to 15 Australian cents after tax at the Dec. 31 balance date, from 14 cents as at June 30, while the dual-listed shares last traded at 13.5 Australian cents on the ASX and 14 NZ cents on the NZX.

BusinessDesk.co.nz

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