Allied Farmers narrows FY loss while taking further Hanover charge
By Jonathan Underhill
Aug 30 (BusinessDesk) - Allied Farmers, the group that turned itself into a penny-dreadful stock by buying the loan books of Hanover Finance and United Finance, narrowed its full-year loss by taking smaller impairments and reducing expenses.
The net loss was $14.1 million in the 12 months ended June 30, from $40.98 million a year earlier, the Hawera-based company said in a statement. Total income, which includes sale of goods, interest and fee income, fell to $21.5 million from $58.8 million.
The bulk of the loss in the latest year, or $10.3 million, comes from a further impairment in the assets acquired from Hanover and United. The deal was valued at $394 million when the assets were acquired in a debt-for-equity swap at the end of 2009. In the latest accounts, the assets of Allied’s Asset Management Services unit, where the former finance company assets are held, were valued at $22.4 million, down from about $37 million a year earlier.
Shares of Allied last traded at 2.5 cents, valuing the company at $2.27 million. It has 90.8 million shares on issue following a massive share consolidation after stock on issue billowed to some 2 billion in the wake of the debt-for-equity deal.
“It has been a further year of restructuring and reducing costs,” the company said. “There is still considerable work to be undertaken but meaningful steps have been made to the company and the positive impact of those steps is now starting to show through to the company’s results.”
The asset management business had a full-year loss of $7.8 million. Its New Zealand assets are now largely made up of residential sections at Jacks Point in Queenstown, with other assets in Australia and Fiji. The book value of its assets still to be recovered of $22 million is largely in property and “an orderly sell down could take several more years for this value to be realised,” it said.
The Rural Services division, which includes livestock and real estate operations, had a loss of $978,000 on revenue of about $14 million. Livestock was restructured into the company’s NZ Farmers Livestock unit, with about 30 percent sold to livestock agents and employees.