Business upgrading systems
Initiatives under way at Geneva Finance include the automation of loan on-boarding when it comes to its Kiwi lending operations, as well as automating management and board reporting.
Quest Insurance’s core system is being upgraded and there will be continued governance strengthening, shareholders at the company’s annual meeting were told.
Events since April have included AM Best reaffirming Quest’s credit ratings in September. Financial strength was rated B (fair) and the issuer credit rating was bb+ (fair).
Lending receivables via its Westpac facility crossed the $100 million mark in August for the first time, and the company delisted from the NZX in July before listing on the Unlisted Securities Exchange.
Looking ahead, the company’s strategic focus will be directed at lending growth. Areas include direct business and new lending opportunities.
As for insurance growth, the company will continue to expand existing business and increase the product range, while there will also be a review into overheads, funding and capital requirements.
As for answers to questions from shareholders, Geneva Finance’s average loan-approval rate from April to August 2024 was 27 per cent with just 66 per cent of those drawn.
Acceptance of insurance cover came in at 95 per cent with the payout of claims made roughly 65 per cent.
One shareholder noted Quest has had very good growth in policies written and operating profitability over the past few years.
With this division’s revenue in 2024 being up by 28 per cent on 2023, the board believes “this growth is expected to continue and is expected to positively impact profitability”.
As for voting, Alan Hutchison, Laurence Goodman, Harley Aish and Grant Hally were re-elected as directors at the AGM on September 26.
Financial overview
Geneva Finance’s group revenue increased by 25.2 per cent to $66m in 2023/24 while pre-tax profit was $3.6m, down 21.1 per cent.
Major items, increases and one-offs totalled $8.5m. One was the result of full-year impact of the high official cash rate, which put upward pressure on the cost of funds and reduced profit margins.
The others included impaired asset expense of $4.7m – up from $100,000, $1.2m in goodwill write-offs, $200,000 in moving to new premises, and an extra $200,000 regulatory and legal costs dealing with NZX matters.
The company’s New Zealand operations notched up a 6.7 per cent rise in operating revenue up to $18.6m, interest expense rose by 50.8 per cent to $8.2m and normalised pre-tax loss increase was $6.4m, up by $5.3m on prior year’s $1.1m loss. The five-year revenue average growth rate is one per cent per annum.
Quest Insurance recorded a 35 per cent increase in gross written premium, up to $46.3m from $11.8m, while its pre-tax profit – before tax-subvention payment – climbed by 99.8 per cent.
Its cash on-hand went up by 24 per cent to $39.3m and its five-year revenue average growth rate came in at 44 per cent per annum. At year-end, it had a “strong solvency position”.
As for Federal Pacific Tonga, this was a “solid and stable performer”. Operating revenue rose by 16 per cent to $2.4m, pre-tax profit was $1.8m – up from $300,000, and its five-year revenue average growth rate was five per cent a year.
