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Veda Advantage's New Zealand operations are receiving a boost from price competition in the home-loan and telecommunications markets after softer retail activity and exchange rate effects muted its performance last year.
The transtasman credit information company yesterday reported a first half net profit of A$17.2 million ($19.39 million), up 18 per cent on last year.
Revenue from continuing operations, excluding the BayCorp debt-collection business it sold last May, was up 6 per cent.
Managing director Andrew Want said the first half result was underpinned by a 9 per cent increase in revenue from Australian operations, offset by a weak result from New Zealand where revenue fell 6 per cent to A$14.5 million because of difficult conditions and an unfavourable exchange rate.
"The overall state of the New Zealand economy has been more challenging than our projections last year indicated," said Want.
That, combined with a fall in the kiwi/aussie exchange rate and regulatory issues, had weighed on New Zealand revenues. However, Want said, there were signs of improving business and consumer sentiment.
Veda's New Zealand director John Roberts said the exchange rate effect was the primary reason for the fall in revenue and, expressed in New Zealand dollars, it was actually up 6 per cent.
While there was an overall softening of New Zealand market conditions late last year, "which I think was very much reflected in the retail sales figures for over the Christmas period", the new year had seen a pickup in inquiries coming through the bureau.
Roberts thought that was driven largely by a fresh bout of mortgage-rate competition among major banks.
"The moment a bank comes out and gives a fixed term offer at a competitive rate and generates a response, people start to mortgage-switch.
"Of course, every time they mortgage-switch, the new bank will use the bureau to check on the person's credit rating."
Similarly, Veda benefited from customer churn created by competition in the telecommunications market.
Want said the company remained on track to achieve a 15 to 20 per cent increase in full-year earnings and had tightened its guidance range to A$55-58 million.
Veda, formerly known as BayCorp Advantage, will cease trading under its old name and adopt new livery on February 26.
The company is to pay a partly imputed A6c a share dividend to New Zealand shareholders on March 22.
Veda shares closed 6c higher at $3.95 on the NZX yesterday.
