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- Release Date: 05/12/12 18:59
- Summary: INTERIM: GFL: GFNZ Group Limited Interim Report - September 2012
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GFL
05/12/2012 16:59
INTERIM
REL: 1659 HRS GFNZ Group Limited
INTERIM: GFL: GFNZ Group Limited Interim Report - September 2012
Financial Result (6 months to 30 September 2012)
The after tax financial result for the year was a profit of $78k vs a loss of
$264k in 2011
Sector Performance:
The company has four trading divisions and the parent (holding) company. The
comparative performance is set out in the table below:
Trading Division Results for the six months ending
Sep 12 Sep 11 Var
$'000 $'000 $'000
1. New Business Lending 451 612 (161)
2. Insurance Operations 162 129 33
3. Old Ledger business model (459) (977) 518
(Collections)
4. Property (Mt Wgton Head office)(2) 31 (33)
Parent Company ** (74) (59) (15)
Group Result 78 (264) 342
** Net of intercompany eliminations
New Business results were behind last year as a consequence of ledger growth,
limited by funding constraints, resulting in lower interest and fee income
during the period and by the costs associated with new funding initiatives,
in particular, costs associated with regulatory compliance being
significantly higher that the prior year.
The insurance operation's long term performance is closely linked to new
business model lending volumes. This year is benefiting from higher new
business lending volumes in the previous year.
The old ledger receivable assets, remain a key focus, with the improved
performance over last year largely attributable to the positive effect the
company's collection activities, particularly the legal programs, are having
on the collectability and resulting valuation of these receivables.
Property company revenue was unchanged through the period with the adverse
profit variance to last year relating to changes in internal debt structuring
put in place so that the parent company fully recovered the cost of external
funding.
The parent company expense primarily relates to the cost of options on issue
as valued at balance date.
Investor Repayments:
The Group paid the scheduled $4.9m principal repayment due on 30th September
2012 in two equal installments on 17th August 2012 and 31st August 2012. As
at 30th September 2012 the Group had made in excess of $132.8m of principal
and interest repayments to investors since entering moratorium on 5th
November 2007. We would like to again take this opportunity to thank our
investors for their continued support over the years.
Rights Issue:
On 20th July 2012, the company entered into an unconditional agreement
(subject only to Geneva shareholder approval), with Federal Pacific Group
Limited (Fedpac) to underwrite a one for four rights issue at 2.75 cents per
share. The rights issue resulted in the issue of 56.2m ordinary shares,
raising (after costs) $1.4m of new equity. Shareholder approval was obtained
on the 6th November 2012 and settlement was on 22nd November 2102. Under this
arrangement, Fedpac, who acquired a 19.99% stake in the company on 28th March
2012 have increased their stake in the company to 33.67%.
Funding:
This vote of confidence by Fedpac (taking a 33.67% stake in the company)
represents a significant milestone as the Group pursues funding opportunities
which include: (a) Funding through a professional investor structure which
to date has generated $3.0m of funding; (b) The likely reactivation of the
group's prospectus and; (c) The pursuit of alternative banking lines to
replace the BOSI facility which is scheduled to be repaid in full by 31st
March 2015.
Covenant Compliance
The Group complies with all covenants and capital adequacy requirements under
its banking facilities, the Reserve Bank and the group's Debenture Trust
Deed.
Strategic Direction
The Group is committed to the consumer finance and insurance market with the
primary focus being on the Automotive sector. Obtaining ongoing sustainable
funding is key to capitalising on this opportunity.
Summary and Outlook
The past 6 months has seen the continued success of the Group in repaying
debenture holders both their principal and interest with these repayments now
exceeding $132.8m since November 2007. The equity to total assets ratio is
21.48% as at 30th September (up from in 19.8% in Mar 12 and 18.5% in Sep 11)
and with the settlement of the rights issue on 22nd November this ratio will
increase to just over 24%. This conservative gearing is seen as key to
successfully attracting the debt funding the business needs to expand its new
business. Attracting this debt funding and a continued focus on collecting
the old business model assets remain the main challenges for the Group. The
board and management of the Group are committed to achieving this.
End CA:00230734 For:GFL Type:INTERIM Time:2012-12-05 16:59:13
(20min delay)