Allied Farmers has reported an unaudited net loss of $77.6 million for the year to June, 121.4% worse than the $34.2 million loss recorded in 2009.The result included a $21.4 million goodwill write off in its investment in subsidiary Allied Nationwide Fin
Allied Farmers has reported an unaudited net loss of $77.6 million for the year to June, 121.4% worse than the $34.2 million loss recorded in 2009.
The result included a $21.4 million goodwill write off in its investment in subsidiary Allied Nationwide Finance, which collapsed into receivership in late August triggering a $137 million payout under the Crown retail deposit scheme.
Net tangible assets per share has been calculated at 2.2c a share, compared with 57c at the previous reporting period.
Allied shares last traded at 3.4c.
Group bank borrowings amount to $62.36 million as at June 30, including $44.3 million on property assets. At the same time last year group bank borrowings were approximately $24 million.
Allied’s cash balance at the end of the period was just $646,000, taking into account debts to Allied Nationwide of approximately $10 million.
Since balance date, Allied has settled the sale of its Five Mile property, which it took over as part of the purchase of Hanover Finance late last year, and has realised some investments in the US.
This should reduce its senior debt facility with Westpac from $16.5 million to approximately $2 million, the company said today.
During the period Allied Farmers took further impairment losses of $20.2 million on the Hanover-acquired assets relating to “events after” tits purchase of the assets last December.
Acquisition costs of $5.98 million were also included in expenses although the company has previously said it is challenging a payment of $5 million to Hanover shareholders Mark Hotchin and Eric Watson.
Allied Nationwide’s contribution to the result was a $19.33 million loss, which has been consolidated in the Allied Group accounts.
Allied Farmers managing director Rob Alloway, who is stepping down in December, said the receivership of Allied Nationwide Finance and the fair value assessment of the Hanover and United Finance assets was disappointing.
“In a number of cases, the combined effect of reduced liquidity in the financial sector and reduced demand for property has severely diminished the security value which backs these assets,” Mr Alloway said in a statement.
“Many had been valued based on assumptions that were subsequently found to be unrealistic. Our fair value assessment process was designed from the outset to be fair, taking into account parameters such as security value, prior charges, borrower risk, guarantor risk and country risk – and has delivered what we believe to be a realistic representation of the value, as it stands today.”
When Allied took over the Hanover loan book, exchanging Hanover’s fixed interest investors’ debt for shares in Allied, the assets were deemed to be worth $396 million.
The assets were revalued at $175 million as at December 31 and are now worth just $95 million.
Since the December statement there have been $85.748 million of additional impairments recorded, $65.545 million of which has been attributed against the fair value of the assets acquired as at acquisition date of 18 December 2009.
Meanwhile, Allied's rural services division posted a $757,000 loss, compared to a profit of $2.05 million last year.
