Allied Farmers narrows FY loss as ex-Hanover asset sales near end, equity deficit widens
Allied Farmers [NZX: ALF], which is in talks with the Inland Revenue Department to settle a $4.2 million tax bill and avoid liquidation, posted a narrower annual loss as it nears the end of a disastrous takeover of the Hanover Finance and United Finance loans books.
The Hawera-based company made a loss of $4.4 million, or 0.02 cents per share, in the 12 months ended June 30, smaller than the loss of $13.9 million, or 0.85 cents, a year earlier. Accumulated losses of more than $156 million left the firm with negative equity of $7.3 million, more than twice the $2.7 million deficit at the end of the 2012 financial year. The shares last traded at 1.7 cents, valuing the company at $1.5 million.
"As in the last year's accounts, the group accounts still reflect negative equity as the consolidated result does not attribute the full market value of the investment in the NZ Farmers Livestock subsidiary and the sale yard properties held," chairman Gary Bluett said in a statement. "There is still considerable work to be undertaken but meaningful steps have been made by the company and the positive impact of those steps is now starting to show through to the company's results."
The company is trying to rebuild after the disastrous acquisition of financial assets from Hanover and United Finance for $394 million in 2009. It has ring-fenced what's left of the assets in its Allied Farmers Investments unit, which had assets of $753,000 and liabilities of $1.21 million, as at June 30.
The asset management unit made a loss of $2.9 million in the year, smaller than the loss of $7.8 million a year earlier. The unit more than doubled annual revenue to $14 million, while taking impairment charges of $3.4 million, down from the $9.3 million charge in 2012.
The bulk of the assets have been sold, and the remainder is expected to be realised this year, Bluett said.
The livestock services unit reported an after-tax profit of $711,000, from $340,000 a year earlier, on sales of $21.8 million.
Allied reduced its secured debt to $5.1 million as at June 30 from $17 million a year earlier.