Ann: HALFYR: MTF: MTF reports half year profit of

• Release Date: 10/05/13 17:11
• Summary: HALFYR: MTF: MTF reports half year profit of $4.7 million
• Price Sensitive: No
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MTF
10/05/2013 15:11
HALFYR

REL: 1511 HRS Motor Trade Finances Limited

HALFYR: MTF: MTF reports half year profit of $4.7 million

Profit after tax was $4.7m (31 March 2012: $2.4m)

New loan originations have continued to improve and are 12.2% ahead of last
year.

Profit before commission and other gain (loss) is up 6% to $19.1m, resulting
from strong interest margin, asset growth and funding efficiencies.
Commission paid to shareholder originators increased 4% to $14.2m.

Operating expense, excluding bad debt, is up 21% on last year.
Administration includes legal fees incurred in defence of High Court
proceedings brought by the Commerce Commission.  The court proceedings
finished in November 2012, with judgement not delivered at the date of this
release.

Depreciation and amortisation has increased 48%, in line with expectations,
as a number of technology projects have been brought into production.

Total assets grew by $12.4m to $420.5m in the six months to 31 March 2013,
with finance receivables up $11.4m on the back of steady sales.  The success
of the franchise network has aided in this turnaround, while dealer finance
is still subdued but steady.

MTF is funded by a combination of committed bank facilities and
securitisation.  Securitised borrowings increased $14.0m to $334.2m, to fund
growth in finance receivables. Securitisation facilities were increased
$33.4m to $375.5m, with $41.3m undrawn at the end of the period.  MTF has
committed bank facilities of $37.0m, undrawn at 31 March 2013.

Capital, including preference shares, of $74.9m (17.8% of total assets) at 31
March 2013 provides a solid base for projected growth over the medium term.

MTF is a pioneer in a number of areas and the focus will continue to be on
improving the customer and originator experience.  For the customer, online
access to account information is available through the MTF website, through
the originating dealer website and on smartphone and tablet.  For
originators, a full suite of management reports is updated overnight and
available online each day.  Online origination provides an immediate answer,
without a wait for 'head office' approval, which is beneficial to both
customer and originator.  Rapid 2, an upgrade to the loan origination system,
is in pilot with a number of originators, who are providing useful feedback,
based on actual operating conditions.  Although there are some user
refinements required, we are satisfied that the system provides the required
regulatory and prudential controls, without compromising convenience and
flexibility.

Sales have continued to grow steadily, as the momentum from the last half of
2012 has continued into 2013.  Despite business and consumer confidence
improving, pessimists continue to outnumber optimists, and until the level of
confidence improves materially, demand for credit is likely to remain
subdued.

The board and management are confident that the effort in implementing new
funding programmes and system improvements place MTF in a position to turn
challenge into opportunity.

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:00236093 For:MTF    Type:HALFYR     Time:2013-05-10 15:11:44