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

• Release Date: 12/05/14 17:57
• Summary: HALFYR: MTF: MTF reports half year profit of $3.0m
• Price Sensitive: No
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					MTF
12/05/2014 15:57
HALFYR

REL: 1557 HRS Motor Trade Finances Limited

HALFYR: MTF: MTF reports half year profit of $3.0m

Profit before commission and fair value movements is up 9%, to $20.7m,
reflecting strong asset growth and funding efficiency. Commission paid to
shareholder originators increased by 10% to $15.6m.

Unrealised loss on fair value of financial instruments totalled $0.8m,
against a gain of $1.9m in the same period last year, giving net profit after
tax of $3.0m (31 March 2013: $4.7m).

Underlying profit after tax, which removes the volatility of unrealised fair
value movements, and provides a more consistent measure of company
performance, was $3.3m (31 March 2013: $3.5m). 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 increased 30% to $200.9m, reflecting increased car sales, increased
market share and an increase in franchises from 30 to 33.  In March, market
share, measured by PPSR registrations, was 12.8% (last year 11.5%).

Operating expense, excluding bad debt, as a percentage of assets under
administration, remained at 2.9% (September 2013: 2.9%).  Administration
expense increased 11%, pushed upwards by legal fees incurred in the defence
of proceedings brought by the Commerce Commission.  Depreciation and
amortisation increased 49%, as a number of major technology projects were
brought online, reflecting the cost of remaining competitive in an
increasingly digital world.

Total assets increased by $43.8m (10%), on the back of strong sales.

Securitised borrowings increased $30m to $380.1m and securitisation
facilities increased $25m to $420.5m, with $39.3m undrawn at year end. MTF
has committed bank facilities of $37m, with $14.4m drawn at 31 March 2014.
The funding position remains sound, with sufficient facilities to fund
forecast growth.

The last six months has seen the delivery of a number of technology
improvements that provide a strong growth platform for the medium term.
Amongst benefits MTF provides to its originators are industry leading finance
and insurance products, digital marketing support that returns the customer
to the originator, and a range of daily performance measurements that enable
benchmarking and daily sales and credit performance measurement.  Customers
have web access to account information, both Android and Apple.

Increasing regulation has become a challenge for the finance industry and MTF
is using the best available technology to ensure that customers and
originators are aware of their rights and obligations and that customers can
be confident that the products and services provided meet their expectations
throughout the term of the relationship.

Interest rates will continue to rise in the next twelve months, in line with
increasing consumer and business confidence, perhaps dampening demand for
motor vehicle funding. MTF will target greater market share through
increasing outlets offering MTF products and by offering products at prices
that meet customer expectations.

The board and management are confident that market leading technology, secure
funding, and a focus on outstanding service to customers and originating
shareholders, put MTF in a position to successfully meet the expectations of
all stakeholders.

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:00250341 For:MTF    Type:HALFYR     Time:2014-05-12 15:57:02