This article is from the Australian Property Journal archive
TRINITY Group has reassured investors it is stable after its auditors discovered the group has a net deficiency of assets following valuation writedowns.
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Trinity posted a net after tax loss of $38 million for the six months to December 2009, which reflected valuation writedowns of Trinity’s investment in the Trinity Enhanced Return Fund and the group’s investment properties.
Trinity chairman Brett Heading said that despite the loss, the result marked a significant turnaround on the back of the company’s FY09 figures.
“As widely documented and reported in the media, the group has numerous legacy issues to deal with.
“During the period to December 31 2009, the group had successfully dealt with a number of these issues and taken numerous steps to settle outstanding issues. The Trinity board are determined to deal with the legacy issues on a prompt basis and remain committed to ensuring that the issues will be dealt with in accordance with the best interests of our securityholders and investors in our unlisted funds,” he added.
Heading said the group has made significant progress over the last six months with particular focus on capital stabilisation which has been a high priority of board and management alike.
“We also feel that the bottom of the asset price cycle has been reached and there is a reasonable expectation that we will see valuation-based losses ease by June 2010,” he stated.
Auditor PKF partner Kim Colyer noted that the group has a net deficiency of current assets at December 2009 of $18 million, incurred losses of $38 million for the half year.
Colyer concluded that group is at risk of breaching its loan covenants within the next 12 months if actual transactions and events result in cash flows which are insufficient to meet the senior debt financier’s requirements.
“These conditions states the existence of a material uncertainty which may cast significant doubt about the ability of the group to continue as a going concern and therefore, whether the group will realise its assets and extinguish its liabilities in the normal course of business,” Colyer staed.
But Heading is confident Trinity will soldier on.
He said the company is advanced in various capital management initiatives which are designed to ensure the company’s ongoing compliance with its future debt covenants.
“The company will keep the market informed of its progress,”
The outlook for Trinity’s funds management business, Trinity Funds Management Limited remains positive as the fund manager continues to manage approximately $800 million in assets under management following an extensive independent review process.
Heading said that the group will continue with the implementation of its capital management strategy in line with its focus on further reducing debt and strengthening the balance sheet.
Trinity reported its net tangible assets at 22 cents, within the range previously announced to the market at the group’s Annual General Meeting. No interim distribution was declared.
Australian Property Journal
