MARAC profit falls 48%
MARAC Finance, the finance company owned by Pyne Gould Corp., said first-half profit fell 48% on impairment charges for bad loans and a downturn in lending.
Friday, February 27th 2009, 1:23PM
by Jonathan Underhill
Net income was $7 million in the six months ended December 31 from $13.5 million a year earlier, the company said in a statement. The impaired asset expense rose to $9.2 million from $1.7 million a year earlier.
Retail funding climbed to $794 million in December, from $557 million in June, helped by MARAC’s admission to the Deposit Guarantee Scheme and its retail bond sale of $104 million. The firm said a pleasing development is an increased level of funds being invested for terms beyond the guarantee scheme period. Liquidity rose to $340 million.
“The result is solid given the difficult economic environment we are operating in, said managing director Brian Jolliffe, who is to step down at the end of the financial year.
Pyne Gould today posted a $17 million net loss for the first half, reflecting one-time items including increased provisioning for impaired assets at MARAC, a share of losses at PGG Wrightson from the writedown of its holding in NZ Farming Systems Uruguay, and the $25 million underwrite facility extended to MARAC to help manages bad loans.
Pyne Gould will pay a first-half dividend of 5 cents a share. Its shares fell 4% to $1.68 today.
Property development lending amounted to $250 million at November 30, or about 18% of MARAC's book, according to Pyne Gould figures. MARAC has a BBB- credit rating with Standard & Poor’s.
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