Sequal to "How to lose $22m in 6 months"...How to lose $31m in 12 months

6 months ago we showed you how PGC shareholders were out of pocket by $22m. Now, 6 months on we were hoping for improved affairs, but regrettably things did not improve. Heartland shares increased significantly in price. The $22m number now increased to $31m and PGC's market value decreased by $4m. The $31m is now a staggering 22% of market value. Australia Equity Partners, ultimately controlled by Vadim Perelman

through his vehicle Baker Street Capital Management and George Kerr

has to shoulder the blame. Mr Kerr, preferred to not attend PGC's AGM, where shareholders expected him and his fellow controlling shareholder Mr Perelman to explain these deals. 

Mr Kerr did indicate then that he was completing a deal to sell Perpetual and with the recent announcement that the RECL was unwounded the NPAT will now be $30m. If you believe that then Mr Kerr's dealings is $1m short of making up for that lost $31m. 

The market is clearly telling PGC that it is not believing any of it, because the market value is $4m less today compared to 12 months ago when Heartland and PGW stock was sold off in haste. 

Any investor that tries to understand the RECL deal will also understand why the market is not buying what Mr Kerr is selling. That deal moved distressed assets from Heartland to PGC and as soon as Heartland received a banking license it moved those assets straight back onto Heartland's balance sheet. I might be a rookie, but I have friends that are seasoned profesionals, which audit and analyse financial statements for a living. They cannot make head or tail out of the RECL deal and see it as nothing more than accounting games to move assets around. Maybe, maybe not, but that is for management to explain. And is why the market is not convinced when management suddenly pulls $20m earnings out of the hat. 

Speaking of hats. I will eat my hat if the $30m in earnings show up as cash on the balance sheet. I will do so gladly.

What a tragedy to see such value destruction of God Zone's oldest company.

--

Cheerio!

jA

Anderson Cooper once said, I think it's a good thing that there are bloggers out there watching very closely and holding people accountable. Everyone in the news should be able to hold up to that kind of scrutiny. I'm for as much transparency in the newsgathering process as possible.