Geneva’s profits jump 71%
Geneva Finance has announced a pre-tax profit of $2.4 million for the three months to the end of June, an increase of $980,000, or 71.4 per cent, from the same period a year ago.
The group’s lending operations reported a $600,000 loss for the first quarter of the 2024/25 financial year, but this was a $100,000 improvement over the previous year and includes NZX delisting costs of $200,000 incurred to date.
Its cost of funds was up $300,000 over the same timeframe as the company’s overall cost of funding remains high.
“Quarter one lending volume decreased by 21 per cent compared to last year, despite an increase in lending inquiries,” adds Geneva in an announcement to the USX on August 12.
“Although asset quality is being maintained, the current challenging economic environment is having an impact as additional provisioning was absorbed in the current quarter. This is an area that is being monitored closely.”
It notes its net receivables ledger amounts to $101.6m, up $1.5m, and the debt litigation and invoice factoring businesses have been exited, with efforts ongoing to collect the remaining outstanding receivables.
Steve Te Waiti, pictured, head of sales and lending, says: “At Geneva, despite the economic headwinds many are facing, we are navigating the current tough market climate with a strategic focus on growth and resilience.
“The recent changes to the Credit Contracts and Consumer Finance Act will now allow us to assess applications that would have previously been overlooked.
“This will likely lead to a significant increase in application numbers in the coming months, but we remain committed to preserving margins and maintaining the quality of our loan book."
Quest Insurance, the group’s insurance business, contributed $2.5m in the first quarter, up by $900,000 from a year ago. Gross written premiums increased by 18.1 per cent to $14m.
Federal Pacific Finance Tonga matched its performance from a year ago and delivered another pre-tax profit of $500,000 in the June quarter.
Geneva says its overall performance in the three months to the end of June demonstrates an improvement in profitability, primarily driven by strong performance from its insurance business.
“NZ lending operations volumes are still recovering from previous challenges mainly due to disruptions in sub-note funding experienced in Q3 and Q4 of the previous year for which a November 2023 extraordinary general meeting was needed,” it adds.
“Loan book quality remains stable amid a tough economic environment.”
