Geneva’s profits climb 45%
Geneva Finance has reported a pre-tax profit of $3.7 million for the six months to the end of September. That’s up by $1.1m and 45.1 per cent on last year.
Although its New Zealand lending operations recorded a pre-tax loss of $1.3m for the period, that was a $200,000 improvement on the same period in 2023/24.
The result also included one-off costs totalling $500,000 related to delist and relist from the NZX to the USX. Funding costs were up $600,000 compared to last year with half of attributed to higher costs of funds.
Loan-impairment charges of $1.2m were up by $400,000 from the prior year, primarily driven by increased arrears in a particular sector during the second quarter. On a positive note, second-quarter lending performance picked up strongly.
The first quarter was down 21 per cent on the previous year, but a big second quarter resulted in total lending of $29.5m for the six months, which closed slightly ahead of last year.
In the floorplan segment, lending decreased by $800,000 million year-on-year, totalling $7.3m for the six months. The net-receivables ledger increased to $105.8m, up by $2.9m from last year.
This also marked a significant milestone as the company’s securitised receivables surpassed the $100m mark for the first time in July 2024.
Quest Insurance’s pre-tax profit of $3.9m was up by $800,000 on last year. Earned premiums of $24m were up by $4.7m and 24.3 per cent versus last year.
Quest, which also maintained strong solvency surpluses over this period, is in the process of applying for its COFI licence, which all licensed insurers must obtain before March 31, 2025, to continue in operation.
On October 11, AM Best reaffirmed Quest’s credit ratings, maintaining a financial strength rating of B (fair) and a long-term issuer credit rating of bb+ (fair) with both ratings carrying a stable outlook.
FPF Tonga’s operations continue to perform well and reported a pre-tax profit of $1m was up by $200,000 on last year.
Due to strong lending demand, the Westpac drawn facility increased to $85.3m, a $5.2m increase on last year. The group has a $100m facility with Westpac. The Kiwibank facility is being repaid, with the current outstanding balance at $1.4m, paid down $1.7m from the previous year. Wholesale investors of $17.1m was up $1.3m on last year.
The group has shown continued improvement in the second quarter, although a rise in loan-book arrears has increased impairment provisioning, impacting the half-year results.
“Current lending-market indicators show arrears levels are increasing and any flow-on effect would mean possible increases in our provisioning levels in the remainder of this financial year,” states the company.
“Recent reductions in the OCR are already lowering funding costs. These will positively flow into our quarter three and quarter-four profit performance.
“The implementation of the new lending onboarding software Credisense will have its initial test runs November with full go-live targeted for early 2025. The new core system implementation for Quest, Insured-HQ’ remains on track to be completed by the end of March 2025.”
