Company starts strategy review
Geneva Finance is to carry out a strategic review of specific areas of the group, such as lending growth, direct business and new lending opportunities.
To be completed this financial year and by working with the board of directors, it will also cover insurance growth – such as expanding existing business and increasing product range.
Overheads, funding and capital requirements will also be reviewed, and there will be a “major focus” on delivering sustainable and improved profit margins.
Looking ahead to the rest of the 2024 financial year, a presentation to shareholders at the company’s annual meeting explains there is uncertainty as to the direction of the official cash rate (OCR).
It is currently at 5.5 per cent with the next Reserve Bank review slated for October 4. The question here is whether the OCR has peaked and if there will be a reduction.
The meeting in Auckland on September 27 also heard that Geneva Finance’s receivables are performing well despite the current economic climate. As for funding, Westpac’s securitisation facility was increased to $100 million in September. This allows for uninterrupted lending while the growth of insurance premiums is expected to continue.
The 2022/23 financial results have been described as “disappointing”, mainly attributable to increases in the cost of funds throughout the reporting period when it came to lending.
There were also increased claims as a result of extreme weather events, while higher overheads included the strengthening of governance structure and increased regulatory costs.
The OCR climbed by 3.75 per cent within the 12-month period, directly impacting on the company’s bottom line.
New heads of lending, insurance, and risk and assurance were appointed as well as an internal audit manager.
In the past financial year, group revenue climbed by 17.8 per cent, while group pre-tax profit of $4.8m was down by $3.4m and 42 per cent when compared to 2021/22.
That said, Geneva’s financials show that consistent profits have been delivered – its five-year average net profit before tax came in at $5.9m with an average movement increase of eight per cent.
Events subsequent to the company’s balance date update since April have included the group entering into a head-office lease starting on June 2 for new premises in Te Kehu Way, Sylvia Park, Auckland, while managing director David O’Connell retired on August 11 and was replaced by Malcolm Johnston.
Changes on board
David Smale and Robin King have been re-elected as board members of Geneva Finance. Smale, who joined the board shortly before September 27’s annual meeting, has 40-plus years in establishing and building businesses in the primary, horticultural and export sectors.
Daran Nair, an independent director, has left the board of directors after a three-year term. The company says a shift in his personal priorities made it increasingly challenging to effectively fulfil his responsibilities as a member.
