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MARAC Finance reinvestment rate rises

Tuesday 26th August 2008

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MARAC Finance, the finance company owned by Pyne Gould Corp., said it held its reinvestment rate at 63% last financial year and lifted profit by 5%.

Net profit rose to NZ$25.9 million in the 12 months ended June 30, the company said in a statement. Operating costs to net income crept up to 37%, it said.

MARAC has managed to avoid the worst pitfalls of dwindling liquidity that has caused more than 20 rivals to fail or suspend payments. This month it established a NZ$300 million facility through its securitization program and negotiated an NZ$80 million increase in its syndicated banking facility.

"MARAC Finance's liquidity was NZ$250 million at July 31," managing director Brian Jolliffe said. "This is a much higher level that the company traditionally holds but in the current difficult market environment is considered a prudent step."

Growth in financial receivables slowed to 8% in the latest year. Impaired assets increased to 11.7% from 8.1%.

By Jonathan Underhill

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