Chow Group FY profit falls 82% on year-earlier property gain, sales rise
Chow Group, the NZAX-listed vehicle controlled by John and Michael Chow, said full-year profit fell about 82 percent, reflecting the impact of a year-earlier property gain, which overshadowed revenue growth in the latest 12 month period.
Profit fell to $1.46 million in the 12 months ended March 31, from $8.1 million a year earlier, the Wellington-based company said in a statement. Revenue rose 102 percent to $2.17 million.
The year-earlier profit mainly reflected a $8.35 million gain in the value of the group's investment property while the 2017 results include a $1 million gain. Total assets are now valued at $19.8 million, according to Chow's unaudited results. Its operating cash surplus was $826,274. Net tangible assets rose to 1.21 cents a share from 1.03 cents. It didn't provide further details of its results.
The 2017 profit represents "a strong full first year of trading with ongoing positive cash flows from operating activities underpinning the core profitability of the company and increasing shareholder value," chairman Michael Chow said in a statement.
The company was finalising its audit and expected to have its annual report published by July 31, he said. The annual meeting would be held in August.
The shares rose 7.7 percent to 1.4 cents, valuing the company at $11.5 million. However, the personal wealth of John and Michael Chow was valued at $150 million in the NBR's 2016 Rich List, double the year earlier, after they acquired Stonewood Homes and completed the reverse takeover of NZAX-listed RIS Group, using the shell to create Chow Group.
The pair started at their parents' takeaway bar in Wellington's Courtney Place, before branching into strips clubs, brothels and property. They reportedly want to build a property portfolio worth $1 billion by 2020.