Shares of Pyne Gould Corp, which is controlled by managing director George Kerr, have resumed trading after filing its late annual report, which was tagged by auditors and showed a bigger decline in profit than in the preliminary results released in August.
The Guernsey-based firm's annual report was tagged by auditor PwC, which qualified its opinion in relation to Pyne Gould subsidiary Torchlight Group's 28 percent stake of the Torchlight Fund LP. Torchlight Fund's own statements have been delayed by the audit of its 100 percent investment in Australian real estate investor RCL.
In giving its qualified opinion, PwC said it was unable to obtain sufficient information about Pyne Gould's investment in Torchlight Group and Torchlight Fund. Pyne Gould placed a carrying value of $52.3 million on Torchlight Fund, and $43.4 million on Torchlight Group as at June 30.
Torchlight, which has targeted distressed assets, acquired almost 100 percent of the assets of residential land investor Residential Communities in the year, and is a cornerstone investor in ASX-listed Lantern Hotel Group. It also holds an 11 percent stake in UK newspaper group Local World.
The annual report also restated lower annual earnings of $18.4 million in the 12 months ended June 30, from $20.1 million Pyne Gould reported in August, a bigger decline from $45.2 million a year earlier. The company maintained it was considering restoring its 50 percent of net profit after tax dividend policy as it is "ahead of its restructuring objectives and is confident in both the financial strength and strategic direction of the company," Kerr said in the annual report.
That's almost three years after Kerr said the firm was no longer a high-dividend stock and needed owners with a long-term view and the ability to inject more capital in his pitch to take over the company after its exit from Marac Finance. At the time, Kerr said "PGC is now a company more likely to re-invest its earnings in its assets with a patient seven years and beyond investment horizon."
Last year, chairman Bryan Mogridge told shareholders the company is seeking to deliver compound growth north of 15 percent over the medium to long term, meaning it will deliver "lumpy results" and has a policy of not providing market guidance.
The company, which migrated its accounts to British-controlled tax haven Guernsey at the start of the year, is looking to list on the London stock exchange in the first quarter of next year, and will begin reporting its accounts in sterling from the 2015 financial year.
Last month Pyne Gould sold its stake in UK motorway investor Equity Partners Infrastructure Co No 1 after failing to win control of that firm's board, and separately settled a fee dispute.
Shares of Pyne Gould were unchanged at 38 cents, having resumed trading after being suspended from Oct. 9.
