Geneva Finance Limited - Half Year Results
GFNZ Group LIMITED RESULTS FOR ANNOUNCEMENT TO THE MARKET
Reporting period: 6 months to 30 September 2016.
Previous reporting period: 6 months to 30 September 2015.
Geneva has confirmed the Group''s results for the reporting period for the 6
months to 30 September 2016.
The results, as follows, include the percentage change for the previous
reporting period of the 6 months to 30 September 2016.
Revenue from ordinary activities:
$7,536,000 31% increase
Profit /(Loss) from ordinary activities after tax attributable to security
holders:
$2,357,000 56% improvement
Profit/(Loss) attributable to security holders:
$2,357,000 56% improvement
Interim/final dividend: nil
Amount per security: $0.00
Imputed amount per security: $0.00
Record date: n/a
Dividend payment date: n/a
Comments:
Financial Result (6 months to 30th September 2016)
The after tax unaudited financial result for the period was a profit of $2.4m
up 56% on the $1.5m profit reported in 2015.
Business Performance:
The group pre-tax profit of $1.8m (up 72% on last year) comprised a trading
entity pre-tax profit of $2.6m less group overheads of $0.9m. A deferred tax
asset of $0.6m was recognized during the period, resulting in the after tax
profit of $2.4m.
Geneva Financial Services (GFSL - The lending business) achieved lending
growth of 12.5% compared to last year. This follows a 26% growth in Lending
in the March 16 year on the back of a 61% increase in lending in the March 15
year. This sustained lending growth has seen the receivables ledger increase
to $55.3m and this in conjunction with Interest yields being maintained and
asset quality being controlled has resulted in this business segment
delivering a $2.0m profit for the six months, a 73% increase on last year.
Quest Insurance Group Limited (Quest): Premiums for the 1/2 year increased
by 70% to $1.6m. This was largely due to the reintroduction of Mechanical
Breakdown Insurance and recommencement of Comprehensive Vehicle Insurance in
the second half of the previous year. The profit after tax increased to $445k
(+43%), is a result of this revenue growth in conjunction with an increase in
investment income. Operating costs and claims incurred were within
expectations.
Stellar Collections (Stellar): Stellar reported a profit of $58k for the
period, $0.3m down on the prior year. The main focus for this segment has
been the collection of the company owned purchased debt ledgers and the
ongoing improvement of the collection management processes. The reduced
profit on last year is largely due to a more conservative view been taken on
the valuation of the residual ledgers referred to above. Operating and
collection costs were as per budget expectations.
Balance Sheet:
Total group assets increased to $76m (26% increase). The company''s equity to
total assets ratio amounts to 28.7% vs 29.3% prior year.
Revenues:
The higher receivables ledger in conjunction with continued lending growth
delivered the 31% increase in revenue earned during the period.
Operating Costs:
As a consequence of the increased lending (+12.5%) and insurance sales
(+70%), operating costs increased by 11% to $3.5m.
Funding:
The group maintained its three sources of funding components during the
period:
a. The securitized funding facility was increased to $45m during the period
and was drawn to $41m at period end, a $10 increase from prior period.
b. Stellar''s facility remained at $3.4m.
c. Professional investor debt funding remained at $4.8m. This debt funding
includes loans from two directors.
Credit Rating:
The group''s insurance company, Quest Insurance Group Limited, was issued a B
financial strength rating outlook stable and an issuer credit rating of bb
outlook stable from AM Best in February 2016.
Key Events:
During July 16, we completed a 7 for 1 share consolidation. The primary goal
being to move the share price away from the "penny dreadful perception" often
associated with low priced shares. This move has been successful and will
over the medium term add shareholder Value.
During August 16, The group paid its maiden dividend of 1.5 cents per share.
This was a milestone event which again, has added shareholder value, and is
indicative of the board''s desire to balance the requirements of the company
to finance its expansion with need to reward our shareholders for their
ongoing support.
Strategic Direction:
While staying focused on our core business, the group is in the process of
upgrading its loan management, sales delivery and collections platforms. This
has been a key focus of the last six months and will continue to be so for
the next twelve months and beyond. These system initiatives will provide
improved service levels to both our introducers and the customers we both
serve. We see, achieving this as delivering on our goal of "making life
easier" for our customers, which in turn will enhance the business
performance and the returns to our shareholders.
Summary and outlook:
Delivering a $2.4m profit for the six months (56% up on last year) is
satisfying, but there remains much to do. With the core business now
established, the key focus'' is on the use of technology to improve customer
service levels and support the expansion of the group''s lending and insurance
and collections services. In addition, as noted in previous reports, the
group''s conservative debt ratios, and now sustainable profitability position
us well for "the right" acquisition opportunity.
End CA:00294282 For:GFL Type:HALFYR Time:2016-12-14 11:24:10