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St Laurence Mortgages announces a strong profit

Tuesday 4th July 2006

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St Laurence Mortgages is part of the wider $1 billion St Laurence property based investment and finance group. The group includes NZDX-listed active property investment vehicle St Laurence Property & Finance. St Laurence is also the portfolio manager of NZX-listed National Property Trust which has approximately $260 million in assets under management.

In the year to 31 March 2006, St Laurence Mortgages recorded total consolidated revenue of $27.4 million, up 51% on the $18.2 million recorded in the previous year. Total assets rose 54% to $226.5 million, while total debenture stock on issue increased by 57% to $201.4 million. The majority of debenture stock issued during the year had a maturity term of two years or more, reducing the company's exposure to short term changes in market conditions.

St Laurence Mortgages' chief executive Paul Chapman said the 2006 result demonstrated the strength of the company's operations. "In the past year we have focused on improving liquidity and increasing our cash holdings to ensure we are well placed to participate in new lending opportunities as they arise."

St Laurence Mortgages' loan portfolio is well diversified geographically with about 70% of its portfolio located in New Zealand, and the balance in Australia. The Australian portfolio, which is concentrated in Queensland, is managed by St Laurence's Sydney based lending and property management team.

Approximately 53% of St Laurence Mortgages' portfolio comprised first mortgage loans, with second mortgage loans comprising the balance. This compared with 48% of first mortgage loans recorded in the year ended 31 March 2005, Chapman said.

St Laurence Mortgages forecasts that its loan portfolio will grow in the next financial year, despite predictions of an economic slowdown. Chapman said, "While growth is important to St Laurence Mortgages, it would not be at the expense of asset quality, with both management and the board focused on the need to maintain a well diversified and conservatively geared portfolio.

"We believe we can achieve this by increasing our focus on markets such as Auckland and Australia which have been largely untapped by us to date. Over the year St Laurence Mortgages has built up its equity and increased its liquidity to prepare for and facilitate this growth.

"There is growing evidence that the New Zealand economy is slowing down with a number of financial market observers predicting a more challenging economic environment. In such an environment, experienced finance companies with strong fundamentals, who keep within their areas of expertise, are better able to weather an economic downturn.

"St Laurence Mortgages is well placed in this respect, particularly from a liquidity and equity perspective. The company benefits from being able to access the considerable experience and expertise in property investment, development and management of the wider St Laurence group," Chapman said.

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