MTF Finance lifts after-tax profit
MTF Finance has announced their results for the year ended September 30, 2018, with net profit after tax increasing 14.2 per cent to $8.3 million.
Profit before commission and fair value movement was up 7.4 per cent, to $52.4m, as solid asset growth has flowed through into net interest margin. Commission paid to shareholder originators increased 6 per cent to $39.9m.
Sales increased 5.5 per cent in 2018 but was a tale of two halves. After a record-breaking 2017, the first half of the year continued strongly. Demand for the non-recourse product, introduced in 2016 in conjunction with Oxford Finance, dropped in April after tighter underwriting criteria were introduced in order to improve credit quality.
Expenses have increased 15 per cent on last year in line with planned levels, reflecting our investment in a new brand, brand awareness and resources to deliver on our strategy. Operating expense, excluding bad debt, as a percentage of assets under administration has held steady at 2.8 per cent.
Total assets increased 11.6 per cent to $748.0m, on the back of good sales. Net interest income, as a percentage of average finance receivables, of 9.3 per cent was consistent with expectations and reflects the competitive pressures of the current lending market.
The MTF Finance Board approved a final dividend of 9.32 cents per ordinary share for payment on 30 November 2018. Total distribution relevant to the period will be 15.32 cents per share or $3.5m.
MTF Finance is aware that consumer demand for continuous technological innovation is strong in the financial services sector. A customer-focused approach, coupled with a business model targeting new opportunities for growth, will be employed to help service this demand in the next financial year.
The MTF Finance franchise network remains the company’s strongest performer with sales up 10 per cent during the year, as initiatives to widen the scope of the company’s traditional consumer market have started to produce positive results. Expectations for this channel remain high with a number of growth initiatives due to commence in early 2019.
An exclusive arrangement with Trade Me Motors promoting MTF Finance through private vehicle listings is currently being piloted in Canterbury and is expected to be rolled out nationwide early in the new year.
