Litigation ‘unwelcome but necessary,’ says PGC

Investment company Pyne Gould Corporation [NZX: PGC] has again filed its financial statements late to the NZX but this time only by a day.

Half an hour after NZX Regulation said PGC faced suspension unless its accounts, due yesterday, were provided within five days, the company produced brief preliminary statements showing a net loss of £1.7 million ($3 million) for the year to June 30.

Net tangible assets at balance date were 26.8p (49c), the company said.

PGC shares last traded at 22c, valuing the company at $45 million.

Commenting on the result, PGC managing director George Kerr said it was involved in several large and complex litigations during the year.

“This is an unwelcome, but necessary, requirement of defending the balance sheet of PGC. We devote considerable resources to this part of the business and fully expect our position to be validated by the courts in all cases. We will only comment on particular proceedings as the results are made available.”

Among the lawsuits is a legal challenge to PGC’s management of Cayman Islands-registered private equity fund Torchlight.

The fund is 42% owned by PGC and represents the NZX-listed company’s biggest asset.

Torchlight’s interests include 100% of transtasman real estate owner RCL, which is in the process of selling sections at Hanley’s Farm near Queenstown, and 36.6% of Australian pub owner Lantern Group.

PGC described the RCL investment as “very long term in nature.”

“The most significant event during the course of the past financial year has been the positive outcome in progressing a plan change at Jack's Point in Queenstown. The first stage of this project was recently released to the market with all 100 sections selling in line with list prices on the day of release.”

PGC, which lost control of Lantern’s board last year, said it would have preferred to take a long-term approach to realising value from the pub portfolio. “However, the [Lantern] board is making progress toward this outcome with a cash distribution and unrealised gains over the year.”

PGC’s accounts consolidate the Torchlight interests and, on a group basis, report a small net loss of £7000 from revenue of £1.3 million.

Consolidated group debt was £42.2 million and total assets were £153.5 million.

After accounting for non-controlling interests of £48.7 million, relating to the rest of Torchlight, PGC’s net equity was £55.7 million or 26.8p a share.

No dividend was declared.   

PGC’s previous half and full year accounts were also filed late, leading to an eight-month suspension of its shares.

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