MTF
14/05/2015 15:01
HALFYR
PRICE SENSITIVE
REL: 1501 HRS Motor Trade Finances Limited
HALFYR: MTF: MTF reports half year profit of $3.2m
Profit before commission and fair value movements is up 6%, to $22.0m,
reflecting moderate asset growth and continued funding efficiency.
Commission paid to shareholder originators increased by 6% to $16.6m.
Unrealised loss on fair value of financial instruments totalled $0.8m giving
net profit after tax of $3.2m (31 March 2014: $3.0).
Underlying profit after tax, which removes the volatility of unrealised fair
value movements and provides a more consistent measure of company
performance, was up 9% to $3.6m (31 March 2014: $3.3m). A reconciliation of
profit after tax to underlying profit is provided on page 1 of the half year
report available at www.mtf.co.nz/halfyearreport.
Sales have remained steady at $202.5m (31 March 2014: $200.9m). MTF's
traditional market of used car finance has come under pressure with the high
NZ dollar making new cars an attainable proposition for consumers and the car
lending market generally remains very competitive. This is reflected in the
market share for the period, measured by PPSR registrations, which has
reduced marginally to 12.2% (30 September 2014: 12.5%).
Operating expense, excluding bad debt, as a percentage of assets under
administration, improved to 2.8% in the first half of the financial year
(September 2014: 2.9%). We continue to focus on strong cost management, while
investing in areas that will ensure the business' future success.
Securitised borrowings increased $18.7m to $452.6m, with securitisation
facilities totalling $487.2m and $34.6m undrawn at year end. MTF has
committed bank facilities of $45m, with $20m drawn at 31 March 2015. The
funding position remains sound, with sufficient facilities to fund forecast
growth. The Warehouse facility has an expiry date of 30 August 2015, and the
rollover process is underway. The facility has a strong track record,
demonstrated by two AAA medium term note issues in the past three years and
keen demand expressed for future issues from satisfied investors.
Our internal development focus continues to be driven by impending changes to
updated consumer laws and regulations. The Responsible Lending Code was
released by the Ministry of Commerce and Consumer Affairs on 17 March 2015,
with the Code and lender responsibility principles being hurried into force
on 6 June 2015.
The code sets out guidance on everything from advertising of credit through
to repossession, and continues the theme of pushing the responsibility for
enforcement back onto lenders. Our digital loan origination platform will
focus on creating simple and effective ways for our originator network to
meet their responsibilities, with smart electronic document capture and best
practice customer affordability assessment the key components in the
pipeline.
The Court of Appeal hearing in the Sportzone case was held in November 2014
with the judgment delivered on 30 March 2015. The Court of Appeal dismissed
the appeal by Sportzone Motorcycles Ltd and MTF.
This case is significant and has implications for the lending industry, as
the principles will be incorporated in the Responsible Lending Code. MTF is
disappointed with the decision and is concerned that the Court failed to
address some key aspects of the case. With the support from others in the
industry, MTF has filed a notice of application for leave to appeal to the
Supreme Court.
Long serving Managing Director, Angus Bradshaw, retired on 1 December 2014
and after a comprehensive recruitment process, facilitated by a national
recruitment consultancy, the Board appointed Glen Todd as Chief Executive
Officer on 4 December 2014. Glen has been with MTF since 1999, and has been
a key member of the senior management team, involved in all facets of the MTF
business.
The board and management are extremely appreciative of the commitment and
contribution of our staff and originators. This year has been, and will
continue to be, a busy year full of change, as we position the company for an
exciting future.
For further information, please contact:
Glen Todd
Chief Executive Officer
Motor Trade Finances Limited
03 474 6370
[email protected]
Visit us at www.mtf.co.nz
End CA:00264317 For:MTF Type:HALFYR Time:2015-05-14 15:01:32
