Provincial centres provide strength

Lachie McLeod (L) and Allan Hubbard are comfortable with the decision to pull the float of South Canterbury Finance

South Canterbury Finance - the privately owned finance company that ditched plans to list on the stock exchange last year - has delivered a strong half-year result, providing would-be investors with further reason for disappointment.

The company, still 97 per cent owned by Allan Hubbard, yesterday reported a 28 per cent increase in pre-tax profit - to a record $18.2 million.

Its total assets grew by 11.5 per cent to $1.39 billion.

Chief executive Lachie McLeod said it was also on track to post a record full-year profit in excess of last year's $30.2 million.

Plans for a $200 million float were announced in November - on the same day Reserve Bank chairman Alan Bollard made a speech warning of an impending economic downturn.

When the float was pulled before Christmas, the company suggested the predicted downturn, an overheated housing market and the vulnerability of finance companies to these developments had influenced its decision.

McLeod said yesterday that South Canterbury Finance was still comfortable with the decision to stay private.

The economic outlook was just one of several reasons for that decision.

After the company had been through the pre-listing process, it became apparent there were several other alternatives.

"We had to go that process to come to that conclusion."

McLeod said it was fair to say that in the provincial centres South Canterbury Finance was based in the economy was still going strong.

Face Finance, the company's plant and equipment financing subsidiary, was experiencing strong growth with lending up by 73 per cent the half-year.

Despite the fact that it was still exploring alternatives to listing, no new capital had been raised by the company.

But McLeod said as far as any future plans to float went, it was a case of "never say never".