Pyne Gould seeks 15% returns over 10 years, won't pay dividends
By Paul McBeth
Nov. 28 (BusinessDesk) - Pyne Gould Corp, which sold its corporate trust unit September, is seeking returns of more than 15 percent over the next decade and doesn't expect to ever pay dividends, according to chairman Bryan Mogridge.
The company, 77 percent owned by managing director George Kerr, expects to sell its Perpetual trust and wealth management units before the year's end, leaving it without any substantial New Zealand assets, Mogridge told shareholders at today's annual meeting in Auckland. If investors are looking for quarterly growth and returns "PGC is unlikely to satisfy your requirements," he said.
"PGC is unlikely to ever pay a dividend as we mentioned at the time of the share split," Mogridge said in speech notes published on the NZX. "We have $97.5 million of net assets and we want to ensure that over a 10-year period we are getting a return that exceeds 15 percent and we believe we can achieve this."
The company's board is "seriously considering the domicile of the company," which is unlikely to be New Zealand, and will update the market on its decision when it is made, he said.
Kerr didn't appear at today's meeting as he was overseas in a bid to close the Perpetual sale, and sent his apologies through a notice to the stock exchange earlier today.
Selling Perpetual will leave Pyne Gould with no direct operating businesses in New Zealand. Its Torchlight Investment Group owns 19.7 percent of investor Torchlight Fund 1, which runs until 2019, and Torchlight Fund 2, which holds the remaining bad loans carved off when Marac Finance was sold into Heartland New Zealand.
Pyne Gould’s Torchlight Securities owns 27 percent of Equity Partners Infrastructure Company No. 1 which in turn owns 17 percent of UK motorway services company Moto International Holdings.
"There have been a lot of 'nay-sayers' with regard to Torchlight, but as you have already heard today, Torchlight is well-positioned and tracking to achieve a return of at least 20 percent over the life of the fund," Mogridge said. "This will impact positively on the PGC balance sheet through its unit ownership and as well the general partner's performance fees during the life of the fund."
Pyne Gould's shares rose 3.9 percent to 27 cents in trading today, having declined 18 percent this year.
Kerr paid 37 cents a share to take control of the company, while warning that the difficult process of selling assets meant Pyne Gould was no longer a generator of dividend income.