Perron’s $1.27bn empire solid

Privately owned investment company Perron Group’s shopping centres and offices have helped it comfortably absorb more than $100 million from downward revaluations of its equity investments.

Positive property revaluations more than matched the equity losses as Perron ended 2007-08 with net assets almost 10 per cent better at $1.27 billion, even though non-current borrowings rose almost 9 per cent to $1.07 billion.

While the latest accounts of the key group company Perron Investments Pty Ltd are only to June 30, before the worst of the market mayhem, they do show how the property, investment and car wholesaling group has generally withstood the difficulties compared to listed investment companies such as Centro Properties Group, GPT and Allco Finance Group.

However, it has not all been plain sailing, according to the annual report, due to the exposure of magnate Stan Perron’s empire to equities and other financial assets held for trading, which underwent a downward fair value adjustment of almost $102 million, compared to an increase of $38 million the previous year.

That had a big impact on after tax profit which more than halved to $112.3 million from $258.9 million.

Like other big institutional-type investors, such as the University of Western Australia, Perron saw the paper value of its investment portfolio fall for the past financial year, slipping to $592.9 million from $653.7 million.

During the period, which included the market’s peak in November last year, the group realised $67.5 million from the sale of equity investments, compared to $25.7 million in 2006-07.

While equities slipped in value, property to June 30 more than held its own, rising to $1.84 billion from $1.64 billion, after including $101.1 million of additions to the asset base and a net fair value adjustment of $107.1 million. The previous year the net fair value adjustment had been $166.3 million. The Perron property portfolio includes a half share of Central Park in the Perth CBD.

While the accounts don’t specify the turnover from the WA Toyota wholesale franchise controlled by the group, it shows that sale of goods for the year was $78 million compared to $66.2 million, on the back of another period for the state’s biggest selling vehicle brand.

Land sales generated $31.2 million compared to $57.3 million while rental revenue was $133.6 million, up from $106.5 million and distributions slipped to $80.3 million from $87 million.

Total revenue before investment adjustments was $409.1 million compared to $369.3 million the year previous.