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Strategic undertakes intensive year-end review

Monday 23rd June 2008

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Strategic Finance says that it is "undertaking an intensive review of its business", but says this is part of its year-end close off, rather than a signal of trouble.

The company made the statement yesterday as part of its compliance with the NZX's continuous disclosure rules. It has made this disclosure although other finance companies are yet to comply.

Strategic Finance chief executive Kerry Finnigan says that the company continually monitors its financial position and loan book and this scrutiny is high at the moment as it is in the last month of its financial year, and this year it has new auditors.

Finnegan says a number of people are reading too deeply into this announcement.

He says the company's reinvestment rates had been trending upwards, but that momentum has reversed following Dominion Finance's statement last week that it was considering a moratorium.

Finnegan says the review covers provisioning, liquidity and doubtful debt levels and that it is too early to say what the outcome will be. However, he suggests that the levels will be higher than what Strategic has previously recorded.

Despite this, the company is likely to still report a good profit.

Finnegan says while it is difficult times with some lenders having trouble raising money, for a variety of reasons, Strategic's loans are maturing before debentures are due for repayment.

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