GFL
13/12/2013 15:43
HALFYR
REL: 1543 HRS GFNZ Group Limited
HALFYR: GFL: GFNZ Group Limited - Half Year Results Sep 13
GFNZ Group Limited - Full Results
GFNZ Group LIMITED RESULTS FOR ANNOUNCEMENT TO THE MARKET
Reporting period: 6 months to 30 September 2013.
Previous reporting period: 6 months to 30 September 2012.
GFNZ Group has confirmed the Group's results for the reporting period for the
6 months to 30 September 2013.
The results, as follows, include the percentage change for the previous
reporting period of the 6 months to 30 September 2013.
Revenue from ordinary activities:
$5,897,000 13% improvement
Profit/(Loss) from ordinary activities after tax attributable to security
holders:
$81,000 4% down
Profit/(Loss) attributable to security holders:
$81,000 4% down
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 2013)
The after tax un audited financial result for the period was a profit of $81k
vs. a profit of $91k in 2012.
Business Performance:
During the period the group benefited from a non recurring, "one off" debt
restructuring profit of $1.2m and the ongoing profitability of the New
business model and its Insurance business. However these gains were largely
offset by losses from the old business model assets to reduce the group
pretax profit for the six months to $81k.
Geneva Financial Services (New Business), which is responsible for the new
business lending programs delivered a $0.4m profit for the period.
Quest Insurance Group Limited's (Insurance) performance is linked to GFSL's
lending volumes and produced a $0.5m profit for the year. However this
result included a $0.3m intra group profit arising from to the sale of
Quest's investment in AMPL to Pacific Rise Ltd which will eliminate from the
group result on consolidation.
Stellar Collections (Old Business) which holds the residual old ledgers and
old business assets, incurred a loss of $1.6m. The results of this sector are
impacted by both the high level of interest bearing debt funding on Stellar's
balance sheet and increased provisioning of $0.3m during the period. To
address these issues, additional equity funding has been provided to Stellar,
reducing future interest cost and further operating cost reduction measures
have been adopted. As noted in previous reports; though, management is
focused on maximizing the returns from this business sector, collection of
these assets in a changing environment remains a significant challenge to the
group.
Pacific Rise Limited (Property) produced a profit of $0.3m for the year, due
to a profit realised on the sale and lease back of our Head office building
in Mt Wellington. Pacific Rise also acquired the investment in AMPL from
Quest at book value during the period.
The parent company (GFNZGL) result includes the "one off" $1.2m gain referred
to above, arising from favourable debt settlement terms negotiated with the
companies bankers when GFNZGL exited moratorium in August 2013. The net
difference between the pretax results above and the audited group pretax
profit result of $81k for the period relates to intercompany eliminations
arising on consolidation.
Balance Sheet:
As at 30 September 13, primarily as a consequence of the successful equity
placements achieved over the last eighteen months, the equity to total assets
ratio of the company has improved to 30.2%.
Operating Costs:
The group's continued focus on cost reduction has delivered operating cost
savings of $0.5m (11%) as compared to the equivalent period last year.
Final Repayment of Interest Bearing Repayment Plan:
During the period the group repaid in full all funds owed under the Interest
Bearing Repayment Plan and as a consequence, the group exited moratorium.
This brings the total repayments made to investors since the group entered
moratorium in November 2007 to $169m, including $42m of interest.
Funding:
As noted above, on 1st August 2013 the group refinanced its operations,
repaying all public and bank debt and exited moratorium. As a consequence,
the group is no longer a Non Bank deposit taker. There are three components
to the Group's new funding:
a. Geneva (the new business model) has secured a $30m securitization facility
which is currently drawn to $17.3m. The opportunity for this business is to
focus on expanding lending volumes and grow profitability.
b. The parent company holds a three year $5.0m loan from the Federal Pacific
Group Ltd (The major shareholder), on terms approved at a meeting of
shareholders on 31st July 2013.
c. Following the recapitalisation of Stellar's balance sheet with an equity
injection from the parent company, Stellar obtained a three year $5.0m debt
funding package. As this funding package included loans from GFNZ Group Ltd
directors, the terms of these loans were approved by shareholders at a
meeting of shareholders on 31st July 2013.
Standard and Poors Credit Rating:
Following the funding restructuring described above, Standard and Poors
upgraded the Group's credit rating from CCC credit watch positive, to B-
outlook positive.
Strategic Direction:
The Group is committed to the consumer finance and insurance market with the
primary focus being on the automotive sector. Having obtained sustainable and
affordable funding, the key focus is to expand distribution of the consumer
loan and insurance products while maintaining asset quality.
Summary and outlook:
We have reported $81k profit for the year compared to the $91k profit the
prior year. While there are a number of challenges ahead, considerable
progress has been made with funding the new business operations with the key
challenge being the expansion of the New business distribution channels.
Achieving this will position the group to return to long term profitability.
In terms of downside risk, as previously reported exiting the "old business"
assets remains the key challenge.
David O'Connell
GFNZ Group Limited
[email protected]
End CA:00245178 For:GFL Type:HALFYR Time:2013-12-13 15:43:36
(20min delay)