PGC 0.00% 20.0¢ pyne gould corporation limited

Ann: HALFYR: PGC: Pyne Gould Corporation Half Year Report 2015

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    • Release Date: 13/06/16 08:30
    • Summary: HALFYR: PGC: Pyne Gould Corporation Half Year Report 2015
    • Price Sensitive: No
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    					PGC                                                                           
    13/06/2016 08:30                                                              
    HALFYR                                                                        
    PRICE SENSITIVE                                                               
    REL: 0830 HRS Pyne Gould Corporation Limited                                  
                                                                                  
    HALFYR: PGC: Pyne Gould Corporation Half Year Report 2015                     
                                                                                  
    10 June 2016                                                                  
                                                                                  
    PGC Interim Financial Results to 31 December 2015                             
                                                                                  
    Operating Performance                                                         
                                                                                  
    Pyne Gould Corporation ("PGC") delivered a cash operating profit of GBP1.596  
    million for the six months to 31 December 2015. This compares with a cash     
    operating loss of GBP5.0 million for the same period last year.               
                                                                                  
    A four-fold increase in investment income to GBP8.430m (GBP2.131m last year)  
    together with lower sales and administration expenses of GBP4.516m (GBP5.56m  
    last year) saw operating income rise to GBP5.187m (GBP1.715m last year).      
    After allowing for non cash items, principally a foreign exchange loss of     
    GBP2.906m (gain of GBP0.176m last year), the company reported an after tax    
    loss for the period of GBP1.546m (last year a loss of GBP5.323m).  This is    
    equal to 0.51 pence per share (last year 2.4 pence per share).                
                                                                                  
    Statement of Financial Position                                               
                                                                                  
    Foreign exchange movements also had a negative impact on the consolidated     
    Statement of Financial Position. As at 31 December 2015, PGC had GBP50.805m   
    of net assets (30 June 2015: GBP55.199m). The reduction of GBP4.394m is after 
    a total of GBP5.301m of non cash foreign exchange adjustments.                
                                                                                  
    On a per share basis, the NTA per share is 24.49 pence per share (30 June     
    2015: 26.61 pence per share).                                                 
                                                                                  
    Foreign exchange movements affected the accounts in two ways. Firstly, there  
    was a non cash adjustment of GBP2.906m in the profit and loss referred to     
    above. Secondly, there was a GBP2.395m adjustment to the balance sheet. This  
    is because the accounts are presented in GBP and a non cash adjustment must   
    be made on translation to presentation currency.  In the year to 31 December  
    2015, this is negative adjustment of GBP2.395m (31 December 2014: GBP2.836m). 
                                                                                  
    Current Assets                                                                
                                                                                  
    PGC Group held consolidated current assets of GBP67.849m (30 June 2015:       
    GBP61.407m) as at 31 December 2015.                                           
                                                                                  
    Group cash balances lifted by GBP20.643m over the six month period, from      
    GBP10.937m to GBP31.58m.                                                      
                                                                                  
    The very strong cash performance was principally generated by Torchlight Fund 
    LP ("TFLP"). Specifically, cash was generated through a strong sales period   
    for RCL in its Victorian residential real estate book, and the sale of Local  
    World to Trinity Mirror.                                                      
                                                                                  
    RCL recorded GBP28.033m of residential site sales over the period. After      
    GBP8.864m of development costs, this generated cash of GBP19.169m. After      
    allowing for interest on borrowings of GBP4.428m the cash contribution pre    
    sales and administration expenses was GBP15.773m.                             
                                                                                  
    The exit of Local World in the period was at 4x initial investment.  This     
    outcome was achieved in less than 3 years and delivered GBP13.606m of cash as 
    well as GBP5m of Trinity Mirror shares and GBP1.318m of deferred cash         
    (subject to warranties under the sale and purchase contract). The details of  
    this transaction have been provided in prior announcements.                   
    PGC Group holds GBP27.124m (30 June 2015: GBP24.614m) in real estate          
    inventories classed as current assets. These inventories represent blocks of  
    land being developed into residential sites for sale over the coming 12 month 
    period. The cash generated from these sales will be at a substantial premium  
    to cost and will be reflected in group profit next year. The cash is budgeted 
    to amortise bridge and working capital finance at RCL.                        
                                                                                  
    Current Liabilities                                                           
                                                                                  
    As at 31 December 2015, PGC Group had GBP58.557m (30 June 2015: GBP66.458m)   
    of consolidated liabilities, down by GBP7.901m over the period.               
                                                                                  
    Current assets of GBP67.849m comfortably exceed all consolidated liabilities  
    of GBP58.557m.                                                                
                                                                                  
    The liabilities principally represent working capital finance and acquisition 
    finance taken on at the time of the RCL credit bid in 2014 and is being       
    amortised over the course of this year.  As noted above, this marks the end   
    of the restructuring period of RCL and means RCL has the financial capacity   
    to internally fund working capital and consider both internal and external    
    funding options for growth looking forward. This allows greater reinvestment  
    in the land bank and consequently greater long run value for investors.       
                                                                                  
    PGC has no long run borrowings.                                               
                                                                                  
    Non Current Assets                                                            
                                                                                  
    PGC Group holds consolidated non current assets of GBP87.245m (30 June 2015:  
    GBP99.991m) with GBP73.910m (30 June 2015: GBP86.508m) in core assets and     
    GBP13.335m (30 June 2015: GBP12.241m) of legacy non core assets in process of 
    divestment.                                                                   
                                                                                  
    Non current inventories at GBP23.697m (30 June 2015: GBP38.394m) are large    
    blocks of land that will not be developed in the coming 12 month period. As   
    time progresses these inventories move incrementally into current assets for  
    development and sale. The long run cashflow from these inventories is         
    substantially in excess of book value.                                        
                                                                                  
    Loans and receivables of GBP22.811m (30 June 2015: GBP23.014m) are            
    predominantly expected to convert to ownership of underlying real estate      
    assets and increase inventories for long term profitable development. The     
    exception is GBP1.318m which is an escrowed cash amount following the sale of 
    Local World which will be held in a cash escrow for 2 years pending           
    settlement adjustments.                                                       
                                                                                  
    Investments of GBP27.402m (30 June 2015: GBP24.560m) include securities and   
    receivables, the largest of which is the TFLP shareholding in Lantern Hotel   
    Group which represents GBP16.596m at market price as at 31 December 2015.     
    Non core assets have a book value of GBP13.335m.                              
                                                                                  
    The largest non core asset is a receivable independently valued at NZD21.2m   
    (GBP9.801m ) This receivable represents the consideration PGC is due for      
    agreeing to exit its carried interest in the owner of Perpetual Trust. PGC    
    has commenced legal proceedings to recover this receivable plus interest and  
    costs.                                                                        
                                                                                  
    The balance is made up of small real estate assets. These include a           
    residential real estate project in Tauranga acquired as a distressed asset    
    from Marac at the time of the restructuring and 2009 rights issue. This is    
    valued at NZD5.8m (GBP2.8m) and will gradually be worked through to cash over 
    the next 5 to 7 years.                                                        
                                                                                  
    Non-Controlling Interests                                                     
                                                                                  
    As previously described, PGC controls and is required to consolidate TFLP.    
    In order to fairly calculate NTA, the accounts must make adjustments and      
    allow for non-controlling interests in its accounts. As at 31 December 2015,  
    PGC held 42.3% of TFLP. Non-controlling interests represent the balance which 
    is GBP45.732 (30 June 2015: GBP39.741m).                                      
                                                                                  
    The full financial accounts for the six month to 31 December 2015 will be     
    available on the PGC website - www.pgc.co.nz                                  
                                                                                  
    For more information, please contact: David Lewis +64 21 976 119              
    End CA:00283877 For:PGC    Type:HALFYR     Time:2016-06-13 08:30:10           				
 
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