Sharechat Logo

Motor Trade Finance lifts annual net profit 9.3%

Monday 26th November 2018

Text too small?

Motor Trade Finance lifted annual net profit 9.3 percent on solid lending growth but says it was a game of two halves.

“After a record-breaking 2017, the first half of the year continued strongly. Demand for the non-recourse product, introduced in 2016 in conjunction with Oxford Finance, dropped in April after tighter underwriting criteria was introduced in order to improve credit quality,” MTF says in a statement.

Net profit for the year ended September rose to $8.2 million from $7.5 million the previous year, but the company says the underlying result was up 14.2 percent.

Although there was no slowdown in profitability – the first-half underlying net profit increase was 13.5 percent - there was a slowdown in sales.

First-half sales were up 21.6 percent on the previous first-half, but annual sales were up only 5.5 percent.

Oxford Finance is owned by Turners Automotive Group and Turners owns 7.9 percent of MTF.

Profit before commission and fair value changes rose 7.4 percent to $52.4 million while commission paid to its shareholder originators rose 6 percent to $39.9 million, it said.

As planned, expenses increased 15 percent, reflecting investment in a new brand, brand awareness and “resources to deliver on our strategy.”

Net interest income as a percentage of average finance receivables was unchanged at 9.3 percent and “reflects the competitive pressures of the current lending market.”

MTF will pay a final dividend of 9.32 cents per share, taking the total distribution for the year to 15.32 cents, up from 13.37 cents the previous year.

The auto lender is owned by motor vehicle dealers but only its 40 million preference shares are listed on NZX. They last traded at 64 cents, off their recent high at 65 cents.

The company says its franchise network remains its strongest performer with sales up 10 percent during the year “as initiatives to widen the scope of the company’s traditional consumer market have started to produce positive results.”

“Expectations for this channel remain high with a number of growth initiatives due to commence in early 2019.”

An exclusive arrangement with Trade Me Motors promoting MTF through private vehicle listings is being piloted in Canterbury and is expected to roll out nationwide early in the new year.

“The company’s traditional dealer market has declined slightly. Market research carried out mid-year reaffirmed the high regard dealers have for the MTF brand. The research provided valuable insights as to where efforts should be focused in order to regain market share,” the company said.

“Originators play a vital role in the building of MTF Finance as a progressive and agile company.”

(BusinessDesk)



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report