Ann: ANNREP: GFL: GFNZ Group Limited Annual Repor

• Release Date: 09/07/13 13:19
• Summary: ANNREP: GFL: GFNZ Group Limited Annual Report - MARCH 2013
• Price Sensitive: No
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GFL
09/07/2013 11:19
ANNREP

REL: 1119 HRS GFNZ Group Limited

ANNREP: GFL: GFNZ Group Limited Annual Report - MARCH 2013

Financial Result (12 months to 31 March 2013)
The after tax financial result for the year was a profit of $91k vs. a loss
of $1.6m in 2012

Results by operating segment:
The Company is managed via operating segments and the below table provides an
analysis of the March 2013 year result on this basis:

New Business      $0.9
Insurance   $0.4
Old Business     ($1.2)
Property  $0.1
Head Office (Corporate) $0.1)

This structure was formally approved by shareholders on 31st March 2011 but
has not yet been formally adopted by the group.

The new business performance was constraint by the availability of
sustainable new future funding during the year. However the new business is
well positioned to expand with the availability of sustainable new funding.
The insurance operations again delivered a profit during the period, however
as this operation primarily sells its products to  "New Business" customers,
consequently its future is similarly results constrained by the availability
of sustainable new funding.
The company's collections strategies, in particular the focus on legal
remedies to get non paying accounts, paying on the old ledgers has delivered
encouraging results  resulting in the company improving on its provision
requirement. However the collection process is still costly and has resulted
in a loss for the year..

March 2013 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 2013 was not achieved largely due to the balance
of the current receivable ledger being much significantly smaller ($14.9m)
than the anticipated balance assumed in the prospective results. The smaller
receivables ledger, in the absence of alternative funding, directly
correlates to the company's need to fund the debt repayment program by
reducing assets. The reported profit was $1.7m adverse to the prospective
profit of $1.8m. Revenue from third party debt collection activities was also
not achieved during the period due to company exiting the third party debt
collection business to use its available resources to collect the old
ledgers.

Investor Repayments:
The group paid both the scheduled $4.9m principal repayments due on 30th
September 2012 and 31st March 2013 early. The 30th September 2013 scheduled
repayment was paid on two equal instalments 17th and 18th August 2012 and the
31st March 2013 scheduled repayment was repaid on 28 February 2013. As at 31
March 2013 the Group had made in excess of $139m 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.

Rights Issue:
The right issue approved by shareholders on 6th November 2012 settled in full
on 19 and 23 November 2012. Existing shareholders took up 6,551,590 new
shares @ $0.275  per share and the remaining 49,622,028 shares were taken up
by Federal Pacific Group Limited ("Fed Pac") as per the underwrite agreement
entered into between the group and Fed Pac. This uptake increased Fed Pac's
shareholding in the company from 19.99% to 33.67%. The rights issue resulted
in $1.4m of new equity.

Funding:
During the year the Group established a professional investor scheme, whereby
professional investors provide funding facilities to the Group by purchasing
a share in a portfolio specified finance receivables owned by the group. In
total the Group has generated $4.6m of new funding during the period via this
professional investor structure. The Group has also registered its debt
prospectus during the period, as at 31 March 2013 approximately $700k new
debenture funds were received. The Group is also actively seeking alternative
sustainable long term funding to allow the Group to exit moratorium.

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. Securing new sustainable
funding is the key to capitalise on this opportunity.

Summary and Outlook:
The past 12 months has seen the Group continuing its recent track record to
repay its scheduled repayments early, these payments now exceeds $139m
(interest and principal). The new equity injection from the rights issue has
increased the Group's equity to total asset ratio to 25.4% (2012: 19.8% &
2011: 16.8%). This conservative ratio positions the company to continue its
endeavors to source new sustainable funding for the Group. The board and
management of the Group are committed to pursuing every funding avenue to
achieve this.

David O'Connell
GFNZ Group Limited
[email protected]
End CA:00238360 For:GFL    Type:ANNREP     Time:2013-07-09 11:19:20