NZF Group Limited Announces Interim Result.
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NZF Group Limited (NZF) | 1:21 pm, Friday 21 November 2008 | NZF | 0.350 |
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NZF
21/11/2008
MARKET INFORMATION
(NZF) NZF Group Limited Announces Interim Result.
Interim Report
For the six month period ended 30 September 2008
The last six months has seen the turmoil in the financial services market continue, with significant changes in both funding and lending opportunities for NZF Group. NZF Group has continued with its conservative approach to credit underwriting in these market conditions.
The Directors are pleased to report that NZF Group achieved a net profit after tax of $1.3m for the six month period ended 30 September 2008, which is in line with expectations and profit guidance given to the market on 15 August 2008. The Directors are also pleased to report that:
- Total assets increased by 5.4% since 30 September 2007 and remain consistent with levels reported at 31 March 2008.
- Total equity increased by 5.2% since 30 September 2007 and 2.28% since 31 March 2008 to $24.888m.
- At 30 September 2008, NZF Group had cash reserves of $6.662m and total undrawn bank facilities of $72.997m.
- Subsidiary companies, NZF Money Limited and Finance Direct Limited, have both been approved under the New Zealand Crown Retail Deposit Guarantee Scheme, effectively guaranteeing qualifying deposits until 12 October 2010.
- Bad debts written off during the six month period were $64k compared to total bad debts of $158k written off during the year ended 31 March 2008.
- Interim dividend of 0.50 cents per share to be paid.
Managing Director, John Callaghan, elaborated on the result saying, “The last six months has seen total assets remain at similar levels reported to March 2008, under difficult market conditions. We have remained conservative in this market given the uncertainty that exists over the ‘credit crunch’ and we have started to see its impact on lenders in our market.”
“We continue to see pressure to reduce the Official Cash Rate (OCR), with pricing remaining a key consideration when assessing new lending opportunities. Continued reductions in the OCR will have an impact on Group results moving forward. We ‘mark to market’ all financial instruments and reducing cash rates will lead to further reductions in these valuations. These may become material. All our fixed rate mortgages are matched with individual interest rate swap contracts for the duration of the fixed rate loan period. As a result, all fixed rate mortgage lending is perfectly hedged and there is no risk to the Group arising from subsequent changes in interest rates. Being perfectly hedged ensures that there is no reduction in cash flow profits resulting from these revaluations of the financial instruments, and once hedge accounting is adopted, future movements will be through reserves and not affect the operating result.”
“As the effect of the international credit markets are being felt in New Zealand, and the increased pressure on mortgages, we expect to see an increase in arrears and potentially increased levels of bad debts. However, we continue to operate a conservative lending approach and closely monitor the performance of all borrowers, which to date has resulted in minimal levels of bad debts.”
Richard Waddel, Chairman, adds “The result achieved is acceptable given the current market conditions and the demise of some higher profile competitors. The trading bank experience of our senior management team and directors has been put to the test and this has kept NZF Group in good standing. The approval of both NZF Money Limited and Finance Direct Limited under the Crown Retail Deposit Guarantee Scheme is an indication of the commitment and competence shown in the management of these companies.”
The Directors have resolved to declare a fully imputed interim dividend of 0.50 cents per share. The record date for the interim dividend is 5.00pm on 5 December 2008 with the payment date being 12 December 2008.
Financial information in this release has been extracted from the unaudited interim financial statements for NZF Group for the six month period ended 30 September 2008.
ENDS
For more information please contact:
John Callaghan Tel 379 9090 or 021 346 262
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