Chow Group reports $114k first-half profit

Chow Group, the NZAX-listed vehicle controlled by property developers John and Michael Chow, has reported a net profit of $114,029 in the six months to the end of September.

That compares to a profit of $8 million for the year to the end of March, which was mainly delivered through a change in the fair value of investment property, which saw a gain of $8.35 million. The interim results for the six months to the end of September 2016 are not directly comparable with the same six months in 2015, as the earlier accounts cover just one month's trading of its 16 Park Avenue short-term accommodation business.

Shares in the group have fallen 90% since the start of the year and currently trade at 1.2c, valuing the company at $9.8 million.

Chow Group's property at 16 Park Ave in Otahuhu delivered an average room occupancy rate of 85.02%, with an average rate of $44 a night. When the Chow brothers reverse-listed their property assets by taking over shell RIS, the independent adviser's report found the financial projections were reliant on the business delivering an occupancy rate of 87% at a rate of $45 a night.

Cash receipts from customers were $1.14 million in the six months to the end of September 2016, compared to $1.07 million in the year to the end of March 2016. Accommodation income was $933,414 compared to $1.04 million in the year to the end of March.

Chairman John Chow said management was now focusing on areas of improvement, having done the ground work.

"Chow Group provides residential accommodation services in a market that New Zealand housing desperately needs and we are confident of building our share in this market," he said in a note to the accounts.

(BusinessDesk)