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Geneva Finance maintains growth

Geneva Finance has announced an after-tax profit of $3.2m for the six months to 30 September 2016.

This was an increase of 34 per cent on the same period in 2016, with revenue from ordinary activities up 18%.

The result represented significant growth on the back of 2016’s 45 per cent half-year increase.

It also comes at a time where the company is finalising a new acquisition that will give its subsidiary, Stellar Collections Ltd, a valuable point of difference in the debt collections market.

The company will also distribute a 1.0 cent per share dividend, payable on 15 December, 2017. This is Geneva Finance’s maiden interim dividend, which will bring total distributions since 1 Apr. 17 to 3.0 cents per share, up from 1.5 cents per share in the prior financial year.

Managing Director, David O’Connell says, “The strong profit performance reflects a lift in profitability in each of the core lending, insurance and collections operations. The profit growth was attributable to the growth in lending and collections revenues, up 12% and 31% respectively; the maintenance of interest yields; control of asset quality; and the growth in revenues from our insurance operations, where net premium written was 125% up on September 2016.”

O’Connell also announced that Stellar has acquired MFL Services Ltd, a software-based debt collection operation.

“MFL’s technology is leading-edge in debt collection, and integration of this technology into Stellar will enhance both operations and give Stellar a significant point of difference in the market by way of service and delivery of debt collection products.”

By delivering a high half-year profit and maintaining conservative debt ratios, O’Connell says the group is well positioned for further acquisitions. 

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Colonial profit up 4.2 per cent

Colonial Motor Co (CMC), has announced a 4.2 per cent increase in annual profit, on the back of continued strength in new vehicle sales.

Sales volumes for the company were up 14 per cent overall, while Net profit attributable to shareholders rose to $22.2 million, or 68 cents per share, in the 12 months ended June 30, from $21.5 million, or 65.7 cents, a year earlier.

The Colonial Motor Company’s history in Wellington dates back to 1859.

Colonial’s shares also rose 4 per cent to $7.80 at market close Wednesday night following the announcement. The share price is $7.75 at time of publishing.

Chairman Jim Gibbons said that while the outlook for both light and heavy vehicles was good, the company is dependent on consumer confidence levels remaining high. “The combination of low interest rates, strong exchange rate and new desirable technologies continues to stimulate growth in new vehicle sales,” Gibbons said.

Autofile reported earlier this month that new vehicle sales are healthy this year. Year-to-date, the new vehicle sector is up 12.6 per cent by approximately 10,000 units on this time last year, with 90,737 vehicles registered compared to 80,704 to the end of July 2016. For the month of July, the top selling models were all light commercial vehicles. The Ford Ranger selling best with 655 units, closely followed by the Toyota Hilux with 654 units, and the Mitsubishi Triton with 342 units.

CMC is Wellington based and largely family owned, operating 20 dealerships throughout the country, 12 of those being Ford Dealerships.

CMC last year divested their interest in Jeff Gray BMW and Mini dealerships, following BMW NZ’s decision not to renew their dealer agreement. The company is developing its heavy vehicles profile, with construction of Southpac Trucks’ new parts and service facility in Hamilton, expected to be completed this year. According to CMC, while the extra heavy truck market declined in both 2015 and 2016, but Southpac Trucks has increased its share of that market. The company reported strong forward orders for heavy trucks going into this year however, a side of their business they say is reliant on a growing agricultural ecnomy.

CMC also intends to open a new dealership in South Auckland and has committed to a new site (subject to resource consent) for Macaulay Motors in Queenstown. The company says the Queenstown site, once open, will double their Ford and Mazda service capacity in the growing Queenstown Lakes District.

CMC will release its annual report in late September.

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Heartland bank posts profit

Heartland Bank Limited (NZX: HBL) has achieved a net profit after tax (NPAT) of $60.8 million for the full year, ending June 30, 2017 (FY2017).

This is an increase of 12 per cent from the previous financial year, which ended June 30, 2016 (FY2016).

According to a statement, the increase in profitability was driven primarily by growth in receivables across all divisions. These included the household, business and rural sector. 

During this time, household net receivables increased by $227.8 million with reverse mortgages, motor vehicles loans and personal loans (including Harmoney) increasing by $126.1 million, $72 million and $40 million respectively. Meanwhile, business and rural divisions’ net receivables increased by $96.2 million and $123.0 million.

Throughout the year Heartland acquired a 25 per cent shareholding in Fuelled Limited, an online small-to-medium business (SME) lender.

Alongside this equity investment, a $2.0 million committed debt facility was provided to enable Fuelled to accelerate its Australasian growth plans.

Fuelled is a New Zealand-based business whose simple on-demand service enables SMEs to receive an immediate cash advance on their outstanding invoices.

Fuelled’s integration with Xero enables its advanced credit assessment engine to make real time credit and financing decisions online.

The directors of Heartland have resolved to pay a final dividend of 5.5 cents per share. The final dividend will be paid on 21 September 2017 to shareholders on the company’s register as at 5.00pm on 7 September 2017 and will be fully imputed. The Dividend Reinvestment Plan (DRP) will apply to the final dividend with a 2.5 per cent discount .

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McLaren records profit

McLaren Automotive has accelerated to a fourth consecutive year of profitability.

The autonomotive manufacturer posted a profit of £9.2M from an annual sales revenue of £649.8M in 2016. This gave McLaren Automotive a fourth consecutive year of profitability in only six years, since start of sales in 2011. This was an increase in profit before tax of 70 per cent compared to the £5.4M reported in 2015.

An operating profit of £65.8M in 2016 was the company’s highest ever, standing at 10 per cent of turnover and representing a 180% increase over 2015.

“The positive financial performance in 2016 was underpinned by a 44 per cent increase in sales revenues and is further proof that McLaren Automotive’s growth plans are both achievable and sustainable,” said McLaren Automotive chief executive officer, Mike Flewitt.

In its first full year of production, the Sports Series family accounted for 2,031 deliveries, the majority of which came from the recently-introduced McLaren 570GT and 570S models. The McLaren 675LT Coupe and Spider models both sold out in weeks and in total 1,255 Super Series cars were sold in 2016.

The Super Series also continued its success story thanks, in large part, to the McLaren 675LT Coupé and Spider models. Having both sold out in a matter of weeks, the limited production, even more driver-focused and higher-performance derivatives of the Super Series started production in mid-2015 but continued through 2016. In total, 1,255 Super Series cars were sold in 2016.

In March 2017 the second-generation McLaren Super Series, the new McLaren 720S, was launched. The new car generated immediate customer interest and some 1,500 orders have been taken to date. A new convertible Sports Series model, the 570S Spider, was announced on 14th June 2017 and makes its world debut this week in the UK at the Goodwood Festival of Speed.

“The McLaren Automotive business continues to perform strongly, with 2016 returning a fourth consecutive year of positive financial results,” said McLaren Automotive chief financial officer, Paul Buddin.

”Profit before tax was up by 70% to £9.2M, from our highest-ever operating profit of £65.8M, an increase of 180% over 2015. These results were driven by vehicle sales totalling 3,286 in 2016 – 99% up year-on-year and another record – and significant growth in revenues from McLaren Special Operations (MSO) and McLaren Automotive Aftersales operations.”

During 2016, McLaren Automotive invested £129.1M in new projects, across the Sports Series, Super Series and Ultimate Series product families. The Track22 Business Plan sees McLaren investing an industry-leading percentage of turnover (20% in 2016) in R&D activities over the period of the plan.

This will take the company towards its objective of producing more than 4,500 vehicles annually by the end of 2022, with at least 50% of these cars featuring hybrid powertrain technology. The Business Plan also includes the development of a fully-electric powertrain for a concept car to evaluate its possible use in a future Ultimate Series. In 2016, the early prototype stages of the development work commenced.

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Ferrari posts large profit

Ferarri’s first-quarter profit has jumped 36 per cent.

(more…)

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GDP increase across board

Gross domestic product rose 1.1 percent in the September 2016 quarter, following an increase of 0.7 percent in the June 2016 quarter.

According to Statistics New Zealand, 13 of the 16 industries were up, with the main weakness coming from the agriculture sector. “This quarter’s rise points to broad-based growth,” national accounts senior manager Gary Dunnet said.

Household spending continued its strong growth, increasing 1.6 percent this quarter, following a 2.0 percent increase in the June quarter.

Service industries continued to grow, increasing 1.1 percent in the September quarter. Manufacturing activity rose on the back of food, beverage, and tobacco manufacturing; and transport equipment, machinery and equipment manufacturing.

Construction grew 2.1 percent, with all construction sub-industries showing increases. This growth also reflected higher construction-related investment, with continued investment in residential building.

GDP per capita increased 0.6 percent this quarter, following a 0.2 percent increase in the June quarter.

Annual GDP growth for the year ended September 2016 increased to 3.0 percent. The size of the economy in current prices was $256 billion.

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Geneva Finance profit increase

Geneva Finance has announced an after-tax profit of $2,357,000 for the six months to 30 September 2016.

This was an increase of 56 per cent on the same period in 2015, while revenue from ordinary activities was $7,536,000, a 31 percent gain on 2015.

“This result, which confirms the company is now positioned for a period of sustainable profitability, has been achieved contemporaneously with the payment of the group’s maiden dividend of 1.5 cents per share, and the seven-for-one share consolidation,” said managing director, David O’Connell.

The group’s pre-tax profit of $1.8m (up 72 per cent on last year) comprised a trading entity pre-tax profit of $2.6m, less group overheads of $0.9m. A deferred tax asset of $0.6m was recognised during the period, resulting in the after-tax profit of $2.4m.

“Sustained lending growth growth, 12.5% up on last year (which was 26 per cent and 61 per cent up on March 15 and March 14 respectively), has seen the receivables ledger increase to $55.3m which – in conjunction with maintenance of interest yields and control of asset quality – resulted in a $2.0m profit from lending for the six months. This is a 73 per cent increase on last year.”

O’Connell said the group is in the process of upgrading its loan management, sales delivery and collections platforms.

“This has been a focus of the last six months and will continue to be so for the next twelve months and beyond as we see increased use of technology as essential to delivering on our goal of ‘making life easier’ for our customers, improving customer service levels and supporting the expansion of the group’s lending, insurance and collections services.”

With the high profit for the six months and the group’s conservative debt ratios and now sustainable profitability, O’Connell says the group is well positioned for the right acquisition opportunity.

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Profit for UDC

UDC Finance has posted a record net profit after tax of $58.5 million for the year to September 30, 2016.

This is a three per cent increase on the previous financial year.

A key contributor to the result was strong lending growth across a diverse range of industries, improved credit quality and a focus on containing costs.

“During 2016 UDC helped customers throughout New Zealand – particularly in the motor vehicles, forestry, transport and construction sectors – take advantage of sustained economic growth and strong business opportunities,” said Wayne Percival, UDC’s CEO.

“The housing and infrastructure build across New Zealand, along with record new car sales, created robust demand for our asset financing expertise, and drove the good result for our business.

“Strong competition among banks for quality lending and deposits put pressure on margins. However, that is now stabilising and with good lending growth we are well positioned heading into the new financial year.”

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