KEY POINTS:
New Zealand Finance's first-half profit has trebled thanks to its purchase of Mike Pero Mortgages shares and the subsequent selldown into the joint venture it set up with Australia's Liberty Financial to take over the company.
NZ Finance's net profit of $5.1 million was nearly 200 per cent ahead of the same period a year ago, boosted by the $3.5 million profit it booked on selling down its Mike Pero stake.
Across the company, revenue rose by just under 200 per cent to $24.9 million.
"The growth has come from our investment in Mike Pero Mortgages and the other financial services within NZ Finance," managing director John Callaghan said.
NZ Finance paid about $16.4 million to amass a 74.7 per cent stake in Mike Pero, including 55 per cent it bought from Gould Holdings late last year at 82c a share. Its bid for all of Mike Pero earlier this year was halted by Liberty's purchase of a 10.1 per cent blocking stake.
NZ Finance and Liberty, which between them held 94.6 per cent of MPM, agreed to sell their holdings into a 50/50 joint venture to mop up the remaining shares and delist the company. The joint venture's offer price of $1.10 a share valued NZ Finance's stake at $20.6 million.
NZ Finance and Liberty, headed by former Wall Street trader Sherman Ma, plan to work the powerful Mike Pero brand harder by expanding its product range beyond home loans.
A lot of work and investment was taking place at present to prepare for the launch of new brands and services over the next six months.
"MPM in itself is performing very well and is tracking as per its budgets," he said.
Overall, NZ Finance had enjoyed a good six months and was "well positioned to benefit from the foundations we've put in place".
The company increased its interim dividend to 0.75c a share from 0.5c last year.
Chairman Richard Waddel said the company had retained most of its profit to ensure steady and planned growth. "We acknowledge the need to balance the income shareholders desire while providing a growth platform for the parent company to continue its expansion plans and build the necessary foundations for a strong and profitable company," said Waddel.
The company was proud to re-attract investors to its secured debenture stock funding.
