Pyne Gould profit slightly up

Pyne Gould Corporation (PGC) made a net operating profit of $29 million for the year to June, slightly ahead of last year's $28.9 million.

PGC's net profit after tax was $66.3 million, compared with $30.2m last year.

This year's figure included a non-operating abnormal gain of $37.3m from the merger of Pyne Gould Guinness with Wrightson to form PGG Wrightson, PGC said today.

PGC is a holding company for finance and financial management companies Marac and Perpetual, which are 100 per cent owned subsidiaries, and rural services group PGG Wrightson, a 22 per cent-owned associate.

A final dividend was declared of 11c per share, fully imputed. Together with the interim dividend of 9c paid in February, it brings the total dividend for the year to 20c, compared with 19c last year.

The interim dividend included a 1c special dividend passed through to PGC shareholders from the special dividend paid by Pyne Gould Guinness before the merger with Wrightson.

PGC chairman Sam Maling said the contribution from PGG Wrightson was down on last year due to merger activity and generally slower trading conditions in the rural sector.

PGG Wrightson contributed $6.7m to the group profit, down from $9.5m.

Trading conditions for PGG Wrightson were less favourable in the latter months of the financial year. The livestock, rural supplies, and seed and grain divisions were the most affected, while the finance and real estate businesses performed well.

Prospects for the rural sector were generally positive, now the exchange rate was more favourable and industry confidence had increased.

Marac 's net profit was up 5 per cent to $24.2m, with finance receivables and operating lease vehicles reaching $1.2 billion, an increase of $135m.

Perpetual had a record result for the second year in a row with revenue up 16 per cent to $19.8m, and net profit after tax up 32 per cent to $3m. Perpetual Trust contributed $2.6m and Mortgage Express $0.4m.

Following the merger of Pyne Gould Guinness with Wrightson, PGC's investment now comprised 62.4m shares in PGG Wrightson and was carried at a value of $89.7m.

For Marac, commercial lending was again the strongest growth area, reflecting the intention to invest additional resources to expand that part of Marac proportionally faster than any other area, PGC said.

Expansion into regional areas undertaken 12 months ago was the foundation of much of the growth achieved this year.

Overall, commercial finance receivables increased by 24 per cent to $428m.

Motor finance receivables were down marginally to $376m, with Marac expecting the selling and associated financing of motor vehicles in New Zealand to continue going through radical change.

Marac would continue to focus on the upper-end of the market, with high-quality vehicles and low-risk borrowers.

Property finance receivables were $251m, up 22 per cent on 2005, with Marac's property business being maintained at similar levels to those at half year, despite an overall softening in the property market.

Mr Maling said that while the economic outlook for the year ahead was more subdued than in recent years, PGC's businesses were in excellent shape with sound strategies in place for growth.

The focus for Marac was on delivering wider distribution for its products and services in markets that were changing and in some cases slowing, he said.

Perpetual Trust was well positioned to take advantage of opportunities and changing market conditions, and again distribution of its products and services to wider customer segments was a key focus.

With the PGG Wrightson merger completed, attention had firmly turned to growing the business and delivering the promised benefits to customers and shareholders.

PGC shares were up 10c early today to $4.15, having ranged between $3.70 and $5.40 in the past year.

- NZPA