PGC blames auditors for delayed annual report two years running

Pyne Gould Corp [NZX: PGC] has blamed a delay in releasing its annual report for the second year in a row on a change in auditors.

The Guernsey-based firm, which restated its 2014 accounts to remove an anticipated gain on the sale of Perpetual Trust, was fined and censured by the NZ Markets Disciplinary Tribunal in January over the delayed release of its 2014 annual report over the firm's inability to obtain sufficient information about PGC's investment in Torchlight Group and Torchlight Fund.

Today, PGC says its 2015 annual report was held up because of delays in the handover of audit information regarding Torchlight from the previous auditors, PwC, to new auditors, Grant Thornton.

A full audited report is expected before the end of next month, the company said. Last month PGC released unaudited results that showed a 99% decline in annual profit to £38,000 as interest income fell, expenses jumped and the asset management firm didn't get a repeat of the previous year's one-time gain. Net operating income fell 62% to £3.4 million, including a 4% decline in management fees to £2.2 million.

Last year, PGC's shares were temporarily suspended after it reported its accounts more than a month late. Its 2014 profit included a $22 million gain on the sale of Perpetual Trust, which it says was due once new owner Bath Street Capital listed the business on the NZX, which is yet to happen.

PGC and Bath Street Capital are now embroiled in a dispute, with the buyer rejecting demands for the $22 million payment in May and denying the claim to shares of the subsidiary company. No further action has been taken since the demand was rejected, while the 2015 accounts showed a one-time gain of 11.3 million pounds on the sale of discontinued operations in 2014.

In February, the Financial Markets Authority said it was investigating PGC's 2014 annual report over the inclusion of the $22 million gain.

Pyne Gould is controlled by managing director George Kerr, an NBR 2015 Rich Lister with wealth estimated at $80 million. He was left in control of a listed company in 2012 when he failed to take the company private in a full takeover attempt.

At the time of his offer he warned the company wouldn't contemplate paying dividends as it sold assets and retail investors could face a bumpy road as he took PGC in directions that wouldn't necessarily generate quick profits. Today, PGC is focused on investments in Australia and the UK through its Torchlight Group, which "manages and co-­invests in proprietary funds focused on non-­traditional investment opportunities," according to its website.

PGC shares last traded at 24 cents, valuing the company at $48 million, and have declined some 38% over the past 12 months.

(BusinessDesk)