Allied Farmers auditor raises concerns
The auditors for Allied Farmers have refused to give an opinion on the state of its books due to concerns about the validity of its cashflow forecasts.
Monday, October 8th 2012, 3:12PM
by Niko Kloeten
Allied Farmers, which has been beset by problems since it purchased the Hanover and United Finance loan books in 2009, filed its audited accounts with the stock exchange today.
Auditors PwC have taken the uncommon step of issuing a “disclaimer of opinion” on the accounts, meaning it hasn’t expressed an opinion about the financial statements.
This is a first for Allied, which received qualified audit opinions both last year and in 2010.
PwC said the statements had been prepared on a going concern basis.
“The validity of this assumption depends on the ability of the company and the group to generate sufficient future cash flows from asset realisations, reach agreement with certain creditors, maintain the continued support of the group’s secured lender, and source new funding.
“We have been unable to obtain sufficient audit evidence upon which to form an opinion whether application of the going concern assumption remains appropriate.”
The accounts were late as PwC were waiting for a response to a loan application, which was declined, to form a view on the going concern assumption.
“The company is progressing with an alternative loan proposal and will keep the market informed of the outcome,” Allied Farmers told the stock exchange today.
It recorded a full-year loss of $14.1 million in the year ended June 30, down from a $40.98 million loss as it continues to write down the value of its Hanover assets, which it bought for $394 million in a debt-for-equity swap in late 2009.
These assets, held in Asset Management Services unit, were valued at $22.4 million, down from about $37 million a year earlier.
Allied Farmers shares last traded at 2.9c each, giving the firm a market capitalisation of only $2.6 million.
It says it is seeking a replacement for its $250,000 overdraft, but is uncertain of that outcome.
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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