KEY POINTS:
Personal loan provider Instant Finance is being frustrated by the lack of confidence in the finance sector.
Chief executive Richard de Lautour said the problem was preventing the company from taking advantage of considerable organic and acquisition growth opportunities available.
The company this week reported it had doubled its profit, achieving a net surplus after tax of $2.45 million for the six months to September 30 compared with $1.2 million for the previous comparable period.
The result was driven by strong lending activity made possible by Instant Finance's access to substantial wholesale funding resources and confidence in the ongoing level of investor support, de Lautour said.
A marked decrease in borrowers failing to repay loans on time also contributed.
"Unfortunately, further industry failures over recent months have had an adverse impact on investor confidence and as a result Instant Finance intends to conservatively manage its lending activities in the second half of the year."
In the latest six months' result, shareholders' equity was $17.5 million, representing 20.7 per cent of total assets. Loan receivables were up 3.6 per cent from $67.4 million to $69.8 million. Total liabilities amounted to $66.8 million.
Instant Finance has more than 19,000 loans. It also also had a committed three-year $30 million facility from Fortress Credit Corporation, capable of being extended to $50 million for a further two years.
De Lautour said yesterday that "market conditions have really deteriorated".
The failure of Nathans Finance in August was probably "almost the nail in the coffin", he said.
"We did notice a marked decrease in our reinvestment rate from that mid-August point on."
- NZPA
