Great year for finance company
Motor Trade Finances Limited (MTF) has reported a full-year after-tax profit of $8.2 million, which compares favourably to $4.6m for the financial year ending September 30, 2012. Managing director Angus Bradshaw says the dealer-owned finance company is continuing to develop market-leading technology. “We took steps during the year with the completion of major projects, including a new web-based origination system and the launch of smartphone and tablet applications for customers and originators.” MTF expects demand for new and used vehicles to continue to improve, mirroring better domestic economic and labour market conditions. “Business and consumer confidence continues its slow recovery, has broadened beyond Canterbury and will drive an increased appetite for credit,” says Bradshaw. “The board and management are confident market-leading technology, secure funding and a focus on outstanding service put MTF in the position to take a greater share of a recovering market.” MTF’s full-year results show profit before commission and other gain (loss) is up 13 per cent to $39.3m, which results from strong interest margin, asset growth and funding efficiencies. Operating expense, excluding bad debt, as a percentage of assets under administration improved to 2.89 per cent while admin expense increased by 27 per cent. This included $1m in legal fees incurred in defending High Court action brought by the Commerce Commission. Bad debt written off totalled $0.3m and total assets increased by eight per cent, or $31.7m, on the back of improving sales. Net interest income, as a percentage of finance receivables, remains at 10.8 per cent. Growth in finance receivables was funded through securitised borrowings, which increased $32m to $350.1m. Securitisation facilities increased $53.4m to $395.5m, with $43.9m undrawn at year-end. Capital, proportionate to assets, is steady at 17.5 per cent and “is sufficient to underpin projected growth over the near term”. Arrears held steady at targeted low levels during the year and – as of September 30, 2013 – 31-plus day arrears stood at 0.60 per cent reflecting “continued focus on quality lending, best practice origination and active management”.
