Brand ambassador only after Mike Pero resigns

WELLINGTON: Mike Pero Mortgages seems set to return to public ownership through the listing of its parent company, Liberty Financial, on the ASX.

Mike Pero Mortgages was delisted from the NZX in 2006 after a takeover by a joint venture company owned by New Zealand Finance Holdings and Liberty, an Australian lender.

The takeover was done at $1.10 a share. Fourteen years on, Liberty now owns 100% of Mike Pero Group, which includes its mortgage, insurance, finance and real estate businesses.

According to Australian media reports, Liberty is seeking to undertake an initial public offer that would value the company at $A1.8 billion ($NZ1.9 billion).

It is expected to raise $A363 million in an IPO priced at 11 times the lender’s forecast net profit after tax, with new investors owning 20% of the company on listing, according to the Australian Financial Review.

Liberty was founded by now USbased Sherman Ma in 1997, after he worked at Credit Suisse and McKinsey & Company. He remains an executive director, with James Boyle as CEO.

The Australian reported that Liberty’s cash net profit in 202021 was expected to be $A160 million to $A170 million. Its New Zealand business is just a small part of that.

Financial accounts for Mike Pero Group show it made an aftertax profit of $6.533 million for the year to June 30, down from $8.936 million.

Its operating incoming rose from $59.4 million to $65.6 million but its expenses also rose from $49 million to $57 million, after a jump in its finance costs driven largely by higher fees and commissions.

Its provisions for impairment also rose from $1.7 million to $2.48 million over the year.

Analysts are bound to be looking closely at impairment provisions across the whole business to see how it has fared under Covid19.

Mike Pero, the man, has exited his ownership of the real estate business which still bears his name.

Companies Office records show Mr Pero resigned as a director of Mike Pero Real Estate on October 20 and his company, MPZ One, ended its ownership of the business on November 4.

His company had a 12% stake as of June 30, which had already reduced from 24% the year before.

In 2018, he reduced his stake from 50% to 24% after reaching a settlement agreement with Mike Pero Mortgages after a longrunning legal dispute.

The settlement was reached during the final stages of a High Court case in which Mike Pero Mortgages attempted to claw back $2.2 million (or $2.4 million with interest) it said Mike Pero overpaid himself.

As part of the deal, Mr Pero also agreed to take an active role in promoting the broader group until at least 2027.

A spokeswoman for Mike Pero Group confirmed Mr Pero still worked with the company as a brand ambassador. — The New Zealand Herald