Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Northern Crest posts loss after licence fee write-off

Northern Crest posts loss after licence fee write-off, cash dwindles

By Paul McBeth

Dec. 2 (BusinessDesk) – Northern Crest Investments Ltd., the last surviving business of Mark Bryers’ failed Blue Chip group, fell into the red this year after writing off a deal that soured in April.

The Sydney-based company, which recently applied to remove itself from the New Zealand Companies Office registry, made a loss of $3 million in the six months ended Sept. 30, compared to a loss of $11,000 a year earlier, according to the company’s first-half report.

Most of that came from a $3.5 million write-down in fees that had previously been charged to Columbus Property Marketing Pty, a company that was to oversee the bulk of its residential investment property distribution activity, and has been replaced by Rutherford Franchising Pty.

In a note entitled ‘fundamental error’, the company said it should’ve disclosed the April 1 transaction as a subsequent event in last year’s annual report when it posted a $3.7 million profit. Last month it called in the liquidators for subsidiary Maine Sheldon Holdings Pty, the unit involved in the failed deal.

Northern Crest, which has shifted its focus to selling licences for its intellectual property, is struggling to keep cash-flow positive after its operation spent more than it earned. It had a short-fall in working capital of $7.8 million as at Sept. 30.

The directors defended its going concern status, and are planning a rights issue that will swap $4.8 million of debt for equity once its suspension on the Australian Stock Exchange is lifted.

“The company is also in discussion with a major bank to raise additional capital to fund the development of its operations going forward,” the company said in a note entitled ‘going concern’. “Whilst the company is meeting its current commitments as they fall due, it also has entered into arrangements with past unsecured creditors to meet those commitments on agreed timeframes.”

Northern Crest, formerly known as Blue Chip Financial Solutions, kept its listing on the Australian Stock Exchange after delisting from the NZX in 2006. It was suspended from trading in Australia in February 2008 after failing to pay its listing fees. The shares last traded at 9 Australian cents.

The company twice avoided liquidation last year, the first time in June when the High Court in Auckland decided the firm’s new board, which sidelined Bryers, would have a better chance of trading out of cash deficit, easing the pressure on the liquidators of the rest of the group. The second time, it managed to convince Robt. Jones Holdings Ltd. to give it more time to repay debt.

Bryers stepped down from the board of Northern Crest in May last year, though he was paid $113,000 in consultancy fees in the latest year. The Serious Fraud Office dropped a fraud investigation into Byers’ dealings in Bluechip while saying the firm may have operated in a “moral vacuum.”

He escaped a prison sentence earlier this year when he pleaded guilty to 34 charges relating to the company’s mismanagement and improper accounting, angering more than 2,000 investors owed some $84 million who saw his punishment of a $33,750 fine and 75 hours' community work as inadequate.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Energy: New Zealand Could Be World’s First Large-scale Producer Of Green Hydrogen

Contact Energy and Meridian Energy are seeking registrations of interest to develop the world’s largest green hydrogen plant. The plant has the potential to earn hundreds of millions in export revenue and help decarbonise economies both here and overseas... More>>

MBIE: 36th America’s Cup Post-event Reports Released

Post-event reporting on the 36th America’s Cup (AC36) has been released today. The reports cover the delivery of the event by Crown, Council and America’s Cup Event Limited, economic impacts for Auckland and New Zealand, and delivery of critical infrastructure... More>>

Fonterra: Farmer Feedback Set To Shape Revised Capital Structure Proposal

With the first phase of Fonterra’s capital structure consultation now complete, the Co-op is drawing up a revised proposal that aims to reflect farmers’ views. A number of changes are being considered to the preferred option initially put forward in the Consultation Booklet in May... More>>

Statistics: Household Saving Falls In The March 2021 Quarter

Saving by New Zealanders in the March 2021 quarter fell to its lowest level in two years after rising sharply in 2020, Stats NZ said today. Increases in household spending outpaced income growth, leading to a decline in household saving from the elevated levels that prevailed throughout 2020... More>>