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- Release Date: 09/07/12 13:55
- Summary: ANNREP: GFL: GFNZ Group Limited Annual Report - March 2012
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GFL
09/07/2012 11:55
ANNREP
REL: 1155 HRS GFNZ Group Limited
ANNREP: GFL: GFNZ Group Limited Annual Report - March 2012
Financial Result (12 months to 31 March 2012)
The after tax financial result for the year was a loss of $1.6m vs a loss of
$8.6m in 2011
Group Restructure:
On 31st March 2011 the shareholders approved a formal restructure of the
company's operations into the four trading divisions. The purpose of the
restructure being, to improve transparency of performance of operations.
While the new structure was not in place for the March 12 financial year, the
following table provides an analysis of the March 12 year result on that
basis.
New Business $0.9
Insurance $0.3
Old Business ($2.6)
Property $0.1
Head Office (Corporate) ($0.3)
Net loss ($1.6)
The old receivable assets continue to be costly to collect. The company's
legal approach with these old receivables is starting to deliver encouraging
results that can result in reducing the cost to collect these assets
significantly. The new business performance is dependant on new sustainable
funding to enable this business to grow. During the year the ledger performed
satisfactorily and delivered positive returns to the company.
March 2012 Comparison to "the plan" forecasts:
The Interest bearing repayment plan incorporated a set of prospective
financial statements for the years to 31 March 2015. The prospective result
for the year ended 31 March 2012 was not achieved. The reported loss exceeded
the prospective financial statements loss of $78k by $1,499k, largely due to
lower lending resulted in lower interest income, largely offset by interest
savings and operating cost savings. Revenue from third party debt collection
activities were also not achieved during the period due to company using its
available resources to collect the old ledgers.
Investor Repayments:
The group paid the scheduled $4.9m principal repayment due on 30th September
2011 on 31st August 2011 (one month early) and the $4.9m payment due on 31
March 2012 on 30 March 2012. As at 31st March 2012 the Group had made in
excess of $126m of principal and interest repayments to investors since
entering moratorium on 5th November 2007.
We would like to take this opportunity to thank our investors for their
continued support over the years.
Funding:
On 28 March 2012 the Group successfully placed approximately 44 million new
ordinary shares with Federal Pacific Group Nominees Limited (FedPac) which
is now a 19.99% shareholder raising $1.2m of new capital. This vote of
confidence by Fedpac represents a significant milestone as the Group pursues
funding opportunities which include: (a) Funding through a professional
investor structure via which FedPac have committed to provide $3.0m of
funding. (b) The 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. During the period the Group had two minor breaches of one of its
banking facility covenants, the details were disclosed in the Group's
September 11 interim accounts. The banking facility terms were amended
during November 2011 when this covenant was removed.
Strategic Direction
The Group is committed to the consumer finance and insurance market with the
primary focus being on the Automotive sector. Over the last four years there
has been considerable rationalization, and increasing barriers to enter into
this sector. As the economy normalizes and comes out of recession there will
be an opportunity to expand this business. Obtaining ongoing sustainable
funding is key to capitalizing on this opportunity.
Summary and Outlook
The past 12 months has seen the continued success of the Group in repaying
debenture holders both their principal and interest with these repayments now
exceeding $126m since November 2007. During that period we have also
developed and now proven the profitability of the new business model
strategy. Going forward, successfully obtaining new sustainable funding
sources so we can expand the new business model together with 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:00224766 For:GFL Type:ANNREP Time:2012-07-09 11:55:06
(20min delay)