KEY POINTS:
Hanover Finance, New Zealand's largest privately owned finance company, is predicting a difficult year ahead but says it is in a strong financial position and is well placed to manage the business through hard times.
The company has just released a new prospectus announcing an after-tax profit of $44.9 million for the year to June 30 - up from the previous year's after-tax profit of $41.8 million.
Chairman Greg Muir said the result had been achieved on the back of a strong loan book and liquidity management.
During the year the company increased its cash and cash equivalent reserves from $85 million in the previous financial year to just under $150 million.
Muir said the cash reserve was unlikely to remain at the $100 million mark but the plan was to "maintain the right level of liquidity" to balance it off with its loan book.
"We expect that levels of new investment and reinvestment rates in secured deposits are likely to be lower than last year. However, we are well placed to manage through this period and deliver good returns to our investors by keeping prudent levels of cash and maintaining a high level of correlation between the maturity of our loans and deposits," Muir stated in the prospectus.
The company has also said it will seek other ways to fund its loan business, which may include loan sharing with a third-party financier.
The prospectus launch on Friday coincided with the resignation of Hanover Group chief executive Sam Stubbs.
