Share
- Release Date: 29/01/14 14:48
- Summary: INTERIM: GFL: GFNZ - Half Year Report - 30 Sep 13
- Price Sensitive: No
- Download Document 4.42KB
GFL
29/01/2014 12:48
INTERIM
REL: 1248 HRS GFNZ Group Limited
INTERIM: GFL: GFNZ - Half Year Report - 30 Sep 13
GFNZ Group announced its results for the six months to 30 September 2013 on
13 December 2013. The unaudited interim result was a net profit of $81k
(2012: $78k).
Restructure
During the period the Company implemented the restructure as per the
shareholder approvals received on 31 Mar 2011 and 31 July 2013.
Operating Segments
Geneva Financial Services (Geneva), which is responsible for the new
business lending programs delivered a $0.4m profit for the period.
Quest Insurance Group Limited's (Quest) 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 (Stellar) 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 (PRL) produced a "one off" 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. PRL 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 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 group pretax
profit result of $81k for the period relates to intercompany eliminations
arising on consolidation.
Moratorium
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.
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.
Outlook
Though we have reported $81k profit for the period compared to the $78k
profit the prior period, the current period includes $1.5m of ""one off""
profits. There remain a number of challenges ahead, in particular:
- 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
Managing Director
End CA:00246468 For:GFL Type:INTERIM Time:2014-01-29 12:48:30
(20min delay)