Saturday, 18 August 2018

Announcement

INTERIM: GFL: Geneva Finance - Half Year Report - 30 Sep 17

13 Dec 2017 13:59NZX
EXECUTIVE SUMMARY

Report from the Managing Director

Geneva Finance Limited reported and an after tax profit of $ $3.2m up 34% on
the $2.4m profit reported in 2016.

Business Performance:
The group pre-tax profit of $2.2m (up 27% on last year) comprised a trading
entity pre-tax profit of $3.3m less group overheads of $1.1m. A deferred tax
asset of $0.96m was recognized during the period, resulting in the after tax
profit of $3.2m.

Geneva Financial Services (GFSL - The lending business): Lending growth
continued and was 8.6% above the previous period. The receivables ledger
increased to $62.5m from $55.3m the prior year. Contractual yields were
maintained and resulted in this business segment delivering a $2.6m profit
for the six months, a 24% increase on last year.

Quest Insurance Group Limited (Quest): Premium written increased by 125% to
$3.7m. Deferral of premium income over the life of the policy, will see the
bulk of the profit benefit being recognized in future periods and as a
consequence Quest delivered a $0.5m profit for the six months to September
17, a relatively modest, 6% increase on the prior period.

Stellar Collections (Stellar): Stellar reported a profit of $0.3m for the
period, $0.2m up on the prior year. During the period Stellar disposed of a
portion of its non paying receivables. This sale had a positive impact on the
valuation of these ledgers contributing to the profit increase.

Balance Sheet:
Total group assets increased to $89m (18% increase). The company''s equity to
total assets ratio amounts to 29.9% vs 28.7% prior year.

Revenues:
Revenue increased by 18% and with the increase coming from all three trading
operations.

Operating Costs:
Operating costs increased by 16% to $4.1m with the increase largely being due
to the increase in direct costs (commissions etc.) associated with the
increases in lending volumes and insurance sales.

Funding:
The group maintained its three sources of funding components during the
period:
a. The securitized funding facility of $45m was drawn to $44m .
b. Stellar''s facility remained unchanged at $3.4m.
c. Professional investor debt funding increased to $7.9m. This debt
funding includes loans from two directors.

Credit Rating:
The group''s insurance company, Quest Insurance Group Limited credit rating
remained unchanged during the period as a B financial strength rating outlook
stable and an issuer credit rating of bb outlook stable, credit ratings is
issued by AM Best.

Key Events:
The June 17 dividend of 2.0 cps was an increase of 33% up on the maiden
special dividend paid in August 2016. Quest''s sales growth strategy (both
direct and through contracted distributers) has delivered a 125% increase on
last year. The sale by Stellar of a core of old ledger(s) non paying accounts
will allow this company to focus more on new business growth opportunities.

Events Subsequent to Balance Date
Geneva''s inaugural interim dividend of 1.0 cents per share (payable on 15th
December) was declared in November 17. This brings total dividends paid of
3.0 cents per share in the 12 months to 15 December 2017, and increase of
100% on the previous 12 months.  On 30th November, Stellar Collections
acquired MFL Limited. MFL is a technology focused debt collection operation
offering a point of difference in business to business debt collection, a
growth area for Stellar.

Strategic Direction:
The group is continuing its focus on the core Lending, Collections and
Insurance operations and in particular, investment in technology to grow and
enhance business performance. In this regard, we continue to invest in our
online introducer platforms, in both lending and insurance and as reported
above in debt collection systems.

Summary and outlook:
The group as a whole had a good six months with all trading segments
delivering improved results as reflected in the 34% half year profit
increase. The group''s debt ratios remained conservative and the business is
well positioned for further acquisitions.

David O''Connell
Managing Director
End CA:00311869 For:GFL    Type:INTERIM    Time:2017-12-13 13:59:37
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