Ann: FLLYR: MTF: MTF reports full year profit of

• Release Date: 16/11/12 17:09
• Summary: FLLYR: MTF: MTF reports full year profit of $4.6 million
• Price Sensitive: No
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MTF
16/11/2012 15:09
FLLYR

REL: 1509 HRS Motor Trade Finances Limited

FLLYR: MTF: MTF reports full year profit of $4.6 million

Profit after tax was $4.6m (2011: $5.6m).

o New loan sales of $288.0m (2011: $267.9m), growth in a slow economy
o Total assets recovered to $408m (2011: $405m)
o Net interest income, as percentage of average finance receivables,
increased to 10.29% (2011: 8.92%)
o Profit before commission and other gain (loss) as percentage of average
total assets increased to 8.58% (2011: 7.68%)

Profit before commission and other gain (loss) was up 5%, to $34.9m,
resulting from strong interest margin and funding efficiencies.  Commission
paid to shareholder originators increased by 8% to $27.4m.   An unrealised
loss on the fair value of financial instruments totalled $0.68m, against a
gain of $0.33m a year ago, a negative movement of $1.01m, giving net profit
after tax of $4.6m, compared to $5.6m last year.

Sales hit a low point in 2010 of $267m in new loans. 2011 was marginally
better, at $268m and 2012 is 7% up, at $288m.  Market share, as measured by
security registrations, has remained above 12% since December 2011, on an
upwards trend. Second half sales were 8.4% up on first half sales, mostly on
the back of improving market share, in a soft market. Sales have improved
further, in the current year.

Expense, excluding bad debt, was up 21% on 2011.  During the GFC, expense
growth was kept to a minimum, with operating expense, excluding bad debt,
maintained at a consistent level from 2007 to 2011.  Recovery in credit
markets and restored confidence has driven significant catch up expenditure,
mostly IT related, on top of additional compliance requirements, resulting
from financial adviser legislation.  Included in expense is a charge of
$1.003m, the write down of investment in a loan origination system.  The
appointed vendor was unable to deliver to expectations and we abandoned a
portion of the work completed, in favour of going with another vendor, whose
product was not available when we started the original project.

Bad debt written off totalled $1.4m (2011: $1.0m), all of which was provided
for in previous years.

Capital at 30 September 2012, at 17.5% of total assets ($71.4m), is
sufficient to underpin projected growth over the near term.

Arrears continue to improve, at 30 September 2012 31+ day arrears stood at
0.60% (2011: 1.85%), a reflection of the continued focus on quality lending,
supported by improved reporting and active management.

In spite of the problems of recent years, and the economic uncertainty that
still exists globally, MTF has continued to prosper and the accelerated
investment of the last twelve months provides a solid platform for the
future.

Global markets for New Zealand exports continue to be weak, on the back of a
currency that is overvalued for the very reason that our trading partners
have not yet found their way, after the GFC. Although we expect demand for
cars, and credit to finance cars, to be soft into the foreseeable future,
economic activity will continue and MTF will be there to take a greater
share.

We can be successful through prudent lending, for the benefit of the borrower
and the lender, by providing better access to information, more transparency
and by respecting the needs and challenges faced by borrowers.

We face the future with confidence.

For further information, please contact:

Angus Bradshaw
Managing Director
Motor Trade Finances Limited
03 467 7988
[email protected]
End CA:00229856 For:MTF    Type:FLLYR      Time:2012-11-16 15:09:19