GFL
05/12/2012 11:49
HALFYR
REL: 1149 HRS GFNZ Group Limited
HALFYR: GFL: GFNZ Group Limited - Half Year Results Sep 12
GFNZ Group Limited - Half Year Results
GFNZ Group LIMITED RESULTS FOR ANNOUNCEMENT TO THE MARKET
Reporting period: 6 months to 30 September 2012.
Previous reporting period: 6 months to 30 September 2011.
GFNZ Group has confirmed the Group's results for the reporting period for the
6 months to 30 September 2012.
The results, as follows, include the percentage change for the previous
reporting period of the 6 months to 30 September 2011.
Revenue from ordinary activities:
$5,201,000 22% down
Profit/(Loss) from ordinary activities after tax attributable to security
holders:
$78,000 130% improvement
Profit/(Loss) attributable to security holders:
$78,000 130% improvement
Interim/final dividend: nil
Amount per security: $0.00
Imputed amount per security: $0.00
Record date: n/a
Dividend payment date: n/a
Comments:
Financial Result (6 months to 30th September 2012)
The after tax financial result for the year was a profit of $0.078m vs a loss
of $0.264m in 2011.
Business Performance:
The company has four trading divisions and the parent (holding) company.
The new Business result was a profit of $451k which was $161k 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, a profit of $162k compared
to $129k profit last year, 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, a loss of $459k, over last years loss of $977k, 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.
Operating Costs:
The group's continued focus on cost reduction has delivered operating cost
savings of $0.4m (9%) as compared to the equivalent period last year.
Interest Bearing Repayment Plan:
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.
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.
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.
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:
We have reported $78k profit for the period. It is a small profit, and our
ability to maintain and grow this profit is finely balanced. The key factors
determining our success in this regard being, (a) our ability to attract
affordable debt funding to replace the scheduled $10.0m per annum, needed for
the $35.0m debt repayment program the company is committed to and (b) the
ongoing adverse economic environment and its impact on the collectability of
the old ledgers.
The past 6 months has also 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:00230713 For:GFL Type:HALFYR Time:2012-12-05 11:49:15
(20min delay)