Christchurch investment company Pyne Gould Corporation has reported a sharp 22% lift in its net profit after tax, but has warned investors the coming year's performance will be flat.
Solid performances across all three Pyne Gould Corporation (PGC) businesses saw it report a $44.8 million net profit after tax (npat) in the year to June 30, up from $36.7 million a year earlier.
There were no abnormals.
Chairman Sam Maling told a media conference yesterday that record contributions from Marac were up 6% at $27.9 million, Perpetual Trust up 26% at $3.7 million and its stake in rural servicing company PGG Wrightson was up 75% at $15.8 million.
Mr Maling said while it was early, he expected PGC in the coming year to perform in line with last year as the company could not escape global credit and local economic issues which would slow growth.
Managing director Brian Joliffe said Marac Finance had performed strongly, assets grew 7.8% to $1.4 billion and net operating ncome up 17% to $73.5 million.
Financial receivables grew 8% to $1.4 billion, but Mr Joliffe said most of that occurred in the first half of the year with growth slowing in the second half of the year.
Ascend, a new finance company focused on small transactions in regional areas, has had one year of business and already has finance receivables of $100 million.
Credit arrears across all divisions were consistent with other years at its benchmark of 0.5%, but Mr Joliffe said in the first few months of this financial year they had increased slightly to 0.6%.
Chief financial officer Alan Williams said Marac had continued its strategy of strength, diversity and communicating.
Mr Joliffe said in an interview that Marac had a strategy of being prudent and conservative with its lending, which would pay dividends in the current tight credit market.
"These are all deliberate strategies to build more conservatism into the business and prove we are not reliant on one particular funding vehicle."
Retail investments slipped in the first three quarters but had steadied and were now at the lower end of its normal range, while money from new investors was attracted and reinvestment was about 63%.
Marac had the support of banks, the company's largest single source of funds, and a programme of syndicated bank support secured in March gave long term certainty of supply along with $300 million in securitisation completed earlier this month.
A medium-term note offer would be offered later this year but Marac had liquidity at balance date of $261 million.
Mr Joliffe expected little growth in the first six months of the new year and profits to be constrained by the current economic slowdown.
Perpetual Trust had another strong performance with revenue growing 10% to $16.9 million while operating expenses grew 9% to give npat of $3.7 million, up 26%.
Total funds under advice rose 11% to $980 million while the number of people seeking investment advice rose 23%, which Mr Joliffe said set the business up well for the future.
PGG Wrightson's dividend rose from $9 million to $15.8 million and he said its stronger performance showed the benefits of the merger between Pyne Gould Guinness and Wrightson were coming through.
Earnings per share for the group rose from 37c in the 2006-07 year to 46c in the year under review, while the dividend has increased from 21c to 23c.
