KEY POINTS:
Pyne Gould Corp, owner of finance company Marac, today reported its December half year net profit rose 23 per cent to $22.1 million.
The company said Marac was profiting from troubled times in the finance company industry that has seen 14 companies collapse in two years.
Marac reported its net profit rose 11 per cent to $14m with revenue up 20 per cent despite turbulent times in the industry.
PGC's unit The Perpetual Trust lifted its net operating profit 19 per cent to $1.8m.
Twenty-two per cent owned PGG Wrightson contributed $7.5m, compared to a contribution of $4.6m last year.
PGC will pay a fully imputed interim dividend of 10 cents per share on March 28, up from 9 cents last year.
PGC said Marac's financial loan book rose 11 per cent to $1.5 billion in the six months.
"Recent issues in the finance company sector have been well documented. This environment has presented significant opportunities for Marac which are reflected in this result," the company said.
Loan applications had increased markedly, meaning the company was able to "pick and choose" those that meet its quality criteria.
The business division grew strongly in the first half with receivables increasing 17 per cent. A primary driver of the growth was the maturing of expanded regional distribution which had broadened Marac to a true national business, the company said.
Ascend Finance produced solid results, vindicating the decision to develop a division that pursued higher return business across the commercial, consumer and property sectors outside major metropolitan areas.
Property lending showed some growth with liquidity in the wider property finance sector enabling Marac to complete transactions which met its strict criteria of strong credit profiles and superior returns, PGC said.
On the back of resilient consumer demand and a strong new vehicle sector, Marac continued to perform strongly across the consumer division.
Instalment loan arrears to total receivables remained relatively constant at a low 0.5 per cent. Impaired asset expense was $1.8m in the current period compared to $700,000 in the corresponding period last year.
While investors generally had become more reluctant to invest in finance company offerings, Marac's reinvestment rate had been maintained within normal historical levels throughout the half year.
A fall in the amount of new money received resulted in a decline in total retail debentures on issue, the company said.
Initiatives to deal with that challenge included receiving additional new facilities from Marac's bankers, while a securitisation programme which started in August had provided new funding of $300m, PGC said.
A new syndicated bank facility with all of New Zealand's major banks was being finalised.
That facility, together with existing funding, would provide enough funding and flexibility for growth in 2008 and would further increase Marac's liquidity.
- NZPA
