GFNZ boosts annual profit 61% on widening margins, bigger loan book

Monday 13th June 2016

GFNZ Group lifted annual profit 61 percent as the finance company, formerly known as Geneva Finance, grew the size of its loan book while widening margins in a low interest rate environment.

Net profit rose to $3.5 million, or 0.73 cents per share, in the 12 months ended March 31, from $2.2 million, or 0.48 cents, a year earlier, the Auckland-based firm said in a statement. That gain was principally from GFNZ's Geneva Financial Services, which grew its loan book by 26 percent to $48.8 million. At the same time, it widened its margins, generating $5.8 million of net interest income, or 63.3 percent of total interest income, compared to $3.4 million, or 52.7 percent of total interest income, a year earlier.

"This has been a pleasing year for the group and we are highly satisfied with the results, which position us well for the future," managing director David O'Connell said. "The profit improvement and conservative balance sheet ensures the group is ideally placed for further growth opportunities, both organically or by way of acquisitions."

GFNZ was one of the few finance companies to survive the sector's collapse last decade, freezing interest payments on its debenture stock in November 2007, when it owed some $132.4 million to investors. Those investors have since been repaid, including $40 million in interest, as the lender slashed staff numbers and closed branches around the country.

The firm, which also operates insurance and debt collection services, specialises in car and personal loans of up to $50,000, and draws most of its funding from a securitisation facility with Westpac Banking Corp. That facility was reviewed in June last year and extended through to July 2017.

The NZAX-listed shares last traded at 5.6 cents, down 20 percent so far this year, and valuing GFNZ at $27.6 million.

BusinessDesk.co.nz

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