KEY POINTS:
Property lender Strategic Finance is taking a long hard look at its loan book and may have to adjust its profit guidance once again, says chief executive Kerry Finnigan.
Strategic, which is majority owned by troubled Australian firm Allco, is New Zealand's fifth largest finance company according to a report last year by brokerage McDouall Stuart, and had total assets of $657 million at the December half year.
Yesterday, Finnigan said his company, which has perpetual preference shares listed on the NZDX debt market, "continually monitors its financial position and loan book".
"Given the current economic environment including the impact caused by the recent high profile finance company failures, trading halts and the slowdown in the property sector, Strategic Finance will be undertaking an intensive review of its business including impairment analysis of its loan book prior to 30 June, being Strategic Finance's financial year end," he said. Earlier this year Strategic downgraded its profit forecast from $31.1 million to $28.2 million. Finnigan yesterday said that forecast was now "quite old".
"At this point in time we haven't determined whether that forecast needs to be changed. We are in the last month of our financial year and we're going through a very intense review of our loans, provisioning and write-offs and we're conscious that whatever decisions management make with regard to that will have to be subject to third party review and scrutiny, ie the auditors, and then following on from that may give rise to an amendment to that forecast position."
"We're just working as hard as we can and we're very clearly focused on liquidity and cash management and making sure that loans repay as and when they are supposed to but it's not without its challenges. I think for me to say otherwise would be entirely misleading."
