Ann: FLLYR: MTF: MTF reports full year profit of $6.1m

• Release Date: 14/11/14 10:00
• Summary: FLLYR: MTF: MTF reports full year profit of $6.1m
• Price Sensitive: No
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					MTF
14/11/2014 09:59
FLLYR

REL: 0959 HRS Motor Trade Finances Limited

FLLYR: MTF: MTF reports full year profit of $6.1m

Profit before commission and fair value movements was up 8%, to $42.3m, a
consequence of good margin, strong asset growth and funding efficiencies.
Commission paid to shareholder originators increased by 8% to $31.6m.  Total
amounts paid to MTF originators, including commission, fees and payment
waiver, increased 11.8% to $50.0m.

Underlying profit after tax, which removes the volatility of unrealised fair
value movements, and provides a more consistent measure of company
performance, held steady at $6.7m (2013: $7.0m).

Unrealised loss on fair value of financial instruments totalled $1.7m,
against a gain of $1.7m last year, giving net profit after tax of $6.1m
(2013: $8.2m).

Sales increased markedly, up 30% to $415.5m, on the back of increased vehicle
sales, an increase in franchises from 30 to 35 and new dealers joining MTF.
Market share, measured by PPSR registrations, was 12.7% in October.  Sales in
the first two months of the new financial year provide confidence for a good
result in the first half of 2015.

Operating expense, excluding bad debt, as a percentage of assets under
administration, held steady at 3% (2013: 2.9%).   Administration expense
includes $1.1m incurred to defend proceedings brought by the Commerce
Commission, and $0.4m for the special meeting called by a small group of
shareholders and the approach from Heartland.

Depreciation and amortisation increased 34%, as major technology projects
moved into production, reflecting the cost of remaining competitive in an
increasingly digital world.

Total assets increased by $100.9m (23%), because of strong sales throughout
the year, with finance receivables accounting for the majority of this
increase, up $91.0m.  Growth in finance receivables was funded through
securitised borrowings, which increased $82.3m to $432.5m.  Securitisation
facilities increased $106.0m to $501.5m, with $67.6m undrawn at year end.

Capital, as a percentage of total assets, has reduced to 14.9% (2013: 17.5%),
because of the growth in assets, and remains sufficient to underpin projected
growth over the medium term.

Arrears remained within targeted benchmarks throughout the year and, at the
date of this report, 31+ day arrears stood at 0.43% (2013: 0.60%), reflecting
the continued focus on quality lending.  Asset quality is a function of
sensible credit standards, and the excellent credit management by the
majority of originators.

MTF continues to focus development around a digital strategy that recognises
rapidly changing consumer expectations and legislative compliance
requirements.  Smartphone and tablet are the preferred choice for buying and
selling, communication, and access to information.  To meet our growth
expectations, we will continue to invest in projects that improve, and
differentiate, our mobile platform.

The last two years have provided substantial sales growth in an economy
buoyed by a lift in consumer and business confidence.  We anticipate growth
to continue, perhaps at levels that are more subdued.  MTF will target growth
in quality lending on motor vehicle assets, through expanding its car dealer
and franchise distribution and by retaining existing customers.

The board and management are confident that market-leading technology, secure
funding and a focus on outstanding service, to customers and originating
shareholders, will enable MTF to continue to prosper.

On 30 August 2014, the directors announced an amendment to ordinary dividend
policy, targeting distribution of 40%-50% of underlying profit after tax,
after any perpetual preference dividends.

Ordinary dividends paid for the year will total 11.2 cents per share (2013:
4.4), with interim dividends totalling 3.3 cents per ordinary share paid in
January, April and July.  On 13 November 2014, the directors approved a final
dividend of 7.9 cents per ordinary share for payment on 1 December 2014.
Total distribution relevant to the period will be $2.6m (2013: 1.0m),
representing 50% of underlying profit.

For further information, please contact:

Angus Bradshaw
Managing Director
Motor Trade Finances Limited
03 467 7988
[email protected]
Visit us at www.mtf.co.nz
End CA:00257662 For:MTF    Type:FLLYR      Time:2014-11-14 10:00:00