MTF ‘confident’ with liquidity levels
MTF Finance is temporarily suspending its dividend distributions to unlisted ordinary shareholders “given the uncertainty around the impact of Covid-19”.
The decision concerning these shareholders, the majority of whom also receive commission income as originators, was made at the company’s annual meeting in Dunedin last week “as a precautionary risk management measure”.
“We have been closely monitoring originator activity – particularly those who have significant exposure to industry sectors deemed at higher risk of economic deterioration – and have already provided advice and support to assist affected customers,” says Kyle Cameron, chief financial officer, in a statement to the NZX on March 20.
MTF Finance will continue to monitor conditions as they develop, and support affected customers and originators, but “remains comfortable with its current provisioning levels”.
“MTF Finance is in regular communication with its funding partners and is confident in our liquidity levels and funding capacity,” adds Cameron.
“The board will continue to approve dividends to perpetual preference shareholders in the normal course of business, unless there is a material change in the company’s ability to do so. The board will review this at the end of the 2020 financial year with the intention to resume ordinary dividend distributions if the board is satisfied the company has prudent levels of working capital to meet forecast requirements.”
Changing conditions
The statement adds MTF Finance’s board recognises the need to keep shareholders up to date with any major impacts the company may experience as a result of changing economic conditions, and has been taking action across the business to address the threat of coronavirus, which are aligned with government and Ministry of Health advice.
“Given the rapidly evolving situation, our focus has been on preparing in case of a more widespread prevalence of coronavirus in New Zealand,” adds Cameron. “This focuses on the safety of our people and originators, while endeavouring to maintain normal operations and service levels.
“The key aspect of our business continuity plans [BCPs] is having the capability for our employees and originators to work remotely for extended periods. At this time, we see no material risk to the availability of our core services and systems.
“Contingency plans are regularly reviewed and further testing is being carried out to ensure readiness for different scenarios. We have already implemented some aspects of our BCP procedures for key operational teams.”
MTF Finance is also monitoring and updating staff on international and local developments around Covid-19 with a view to the health and safety of its people, and containment strategies of health authorities. It has introduced measures for staff, originators, customers and visitors, such as keeping workplaces healthy, communicating with employees and restricting non-essential travel.
