What's in a name? Ask Elders Finance

By Deborah Hill Cone

Friday 7th May 2004

Elders Home Loans has changed its name to United Home Loans following a legal challenge to the name from the company's former owners.

On Monday the branding on the Elders home loans page was altered, while the name United Home Loans has also been reserved at the Companies Office.

Elders' parent company, Hanover Group, said Elders Home Loans was rebranded United because that name was more closely associated with the retail sector. This did not mean Elders' name was being dumped.

"If we had to change the Elders name we would not change it to United," Hanover chief executive Kerry Finnigan said.

A change would mean a marketing upheaval for the company, which spends hundreds of thousands of dollars on television and print advertising promoting the brand Elders.

The Elders name is associated in the minds of consumers with heartland New Zealand and farming and the company's advertising has sought to reinforce this impression.

In fact only 5% of Elders' loan book is now lent to "rural and commercial businesses," with 64% lent to property investors and developers, its latest full-year accounts show.

In February Elders New Zealand, also known as Fresha New Zealand, applied to the High Court in Auckland for an injunction to stop Hanover using the name.

The plaintiff, which four years ago sold the finance business to Hanover's owners Eric Watson and Mark Hotchin, claimed Hanover Group (although it was called Elders back then) had a limited period agreement for the use of the Elders name, which had expired.

Elders New Zealand managing director Stuart Chapman said Elders Australia was owner of the name.

Elders New Zealand is owned by local businessmen Chapman, Eric Spencer and Ian Wills.

As of last week a court date had not been set for the hearing and lawyers for both parties were believed to be in negotiations to come to a resolution over the issue.

At the time the court proceedings were filed Elders said the challenge to the name was commercially motivated.

"We bought the Elders business four years ago, which included the brand and the name and the goodwill, and payment was made for these as well as for a restraint of trade on the vendor as to the use of the name," Finnigan said in February.

Meanwhile, KPMG's Financial Institutions Performance Survey out this week shows the non-bank finance sector grew by 17% in 2003 to assets of $10.5 billion.

Elders Finance was the fourth-largest finance company with total assets of $578 million, behind UDC Finance (part of ANZ), South Canterbury Finance and Marac Finance (formerly Allied Finance.)

Hanover Group boasts it is the largest privately owned finance company in the country with assets of more than $1 billion but does not provide consolidated accounts for the survey.

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