MARCH 17 PROFIT & FINANCIAL POSITION GUIDANCE
Mar-17 Mar-16 Increase
Unaudited Audited %
$M $M
Pre-tax Profit 3.8 2.4 59%
After Tax Profit 5.1 3.5 45%
Cash on Hand 11.0 8.0 37%
Total Assets 84.4 69.6 21%
Net Assets 24.7 20.3 22%
Dividends Aug 16 1.1
Jun 17 1.4 33%
ABOUT GENEVA
NZ Owned: Formed in 2002, Entered Moratorium in 2007, exited moratorium in
2013 / Based in Mt Wellington
3 Businesses Activities:
LENDING:
Provides Motor Vehicle and Personal Loans: Ledger now $59m yielding 18%,
Bad Debts 3.5% over 4 years = 0.9% p.a.
Profile Lender - Profile Clients on Age, Credit, Stability Residence,
Stability Employment, Affordability
We categorise Clients into 4 groups (Gold+, Gold, Silver, Bronze)
E.G. Gold+ (Bank Client) 32% of our business, Average Yield 15%, Max Lend
$65k
Bronze (Poor Credit and or Beneficiary) 9.0% of our business, Average Yield
25%, Max Lend $7k
INSURANCE:
Full Insurance Licence
Four Products Comprehensive MV Insurance, GAP, Mechanical breakdown
Insurance, Lifestyle Protection Insurance
Historically, Primarily supporting Geneva''s lending operations / Now
expanding into other areas
DEBT COLLECTION:
Historically, collecting Geneva''s OLD ledgers
Now expanding into other debt collection services
STAFF: Employ 34 Staff
MAJOR SHAREHOLDER: Federal Pacific Group Ltd 58% / Owned by Alistair
and Alan Hutchison
FPG were founding shareholder in CBL and are still a major shareholder /
Have extensive finance / Insurance sector
investments and experience.
SHARE ANALYSIS Mar-17 Mar-16
Unaudited Audited Increase
cps cps %
Pre-tax Earnings per Share 5.4 3.4 59.2%
After Tax Earnings per Share 7.2 5.0 44.6%
Net Assets per share 35.0 28.8 21.8%
Net Tangible Assets per share 30.4 26.0 17.1%
Dividends Special Maiden Dividend Aug 16 1.5
YE Mar 17 Jun 17 2.0 33.3%
Geneva Finance Market price (5 May 17) 56.0
Market PE On Pre-tax Earnings 10.4
Market PE On After-tax Earnings 7.7
Key issues: PERCEPTION Communication with Market
NZAX Listing
PERFORMANCE
BUSINESS STRENGTHS/ WEAKNESSES/ OPPORTUNITIES / RISKS
STRENGTHS:
a Low Market Share in all areas of operation Lending / Insurance / Debt
Collections
b Experienced / Good Management
c Strong Balance sheet Equity to Total Assets ratio is currently 29.2%
Data is as at Mar 17 (Unaudited) With a $56.4 M acquisition 17.5%
With a $38.8 M acquisition 20.0%
d Strong Cornerstone Shareholder Federal Pacific Group Ltd (58%)
WEAKNESSES
a Concentration of business in Auckland
b Small Size/ Depth of management may be perceived as aweakness / This is not
the case
BUSINESS STRENGTHS/ WEAKNESSES/ OPPORTUNITIES / RISKS
OPPORTUNITIES:
a Lending: Expansion "up the food chain" and "geographically"
b Insurance: Into the 3rd party sector
c Debt Collection: Contingent debt collection/ Distressed asset purchases
d Acquisitions/ Partnerships: - E.G. Janssens
- Looking for right opportunity, Typically assets are overvalued.
e Amount of "increasingly higher risk debt" being issued.
RISKS:
a Geneva Balance Sheet Risk Low
b Geneva Earnings Risk Expected Mar 18 Growth is largely a function of Mar
17 performance
Beyond Mar 18 is a function of the Market and how we react
c Market: Amount of "increasingly higher risk debt" being issued.
TRADING Geneva Financial Services Ltd
Unaudited
Lending Increase
$M %
Mar 14 17.5
Mar 15 28.2 61%
Mar 16 35.5 26%
Mar 17 40.0 13%
Commentary: - Contribution pre Group Overheads $4.5m up 52% on last year
- Lending growth has driven profit Increase
- Mix Change is into lower margin / lower risk
- Predominantly Auckland and in particular South Auckland
- 18% Average yield
- Bad Debts 3.5% over 4 years, equates to 0.9% p.a. yield loss
- Currently finance circa 0.4% of Motor Vehicle sales
- Securitisation Funding line of $45m with ability to expand
Future: - Expand both geographically and up the food chain
- Improve customer Service experience
- Continued conservative lending, remain well positioned for acquisitions /
partnerships
TRADING Quest Insurance Group Ltd
Gross Written Premium Premium Increase Premium Increase
Sales % Released %
$M $M
Mar 14 Audited 1.4 1.4
Mar 15 Audited 1.4 2% 1.5 9%
Mar 16 Audited 2.6 87% 1.5 0%
Mar 17 Unaudited 3.0 14% 2.5 61%
Commentary: - Contribution pre Group Overheads $0.9m up 81% on last year.
Expect continued growth
- Partnership agreement with "Janssens Insurance" from 1 Apr 17.
- Development of Quest own distributional Channel (When Geneva is not
providing the finance)
- March 18 Gross Written Premium expected to grow by 120%
- Premium Deferral will delay full impact being reflected in the Revenue
Statement
- A&M Best "B" Financial Strength Rating and "bb" Issuer Rating
, - Solvency Capital $7.1m, $2.1m above Reserve Bank requirement
TRADING Stellar Collections Ltd
Historically Stellar has been responsible for collecting the "old ledger(s)"
This task is largely complete
Total Old Ledgers BV $3.2 M Unaudited
Face Value of Accounts that have paid in last 30 days $12.8 M
Unaudited
Cash collected from these accounts in the Mar 17 year $2.1 M
Unaudited
In process of building management infrastructure to expand this operation to
include:
Contingent debt collections
Purchase of 3rd Party distressed debt
Benefits to be gained in latter part of 2018 and in 2019
HISTORIC PERFORMANCE HIGHLIGHTS
Oct 02: - Company began trading
Mar 07: - Period of rapid growth - 22 Branches, $180m of Assets, 325 staff.
Nov 07: - Entered Moratorium.
Changed direction/ Up food chain, developed customer
profiles, max lends, rate for risk. *
Aug 13: - Exited Moratorium: Having repaid investors $143m incl $40m of
interest. *
1 Branch, $43m of Assets and 31 staff
Aug 13: - Securitisation facility $30m. *
Apr 14: - Rights issue $6.1m fully subscribed. *
Jun 15: - Securitisation Facility increased to $35m *
Feb 16: - Quest Insurance financial strength credit Rating "B", Issuer
rating "bb" *
Apr 16: - Quest exits small insurer regime *
Jun 16: - Securitisation Facility increased to $45m *
Jun 16: - 7:1 Share consolidation
HISTORIC PERFORMANCE HIGHLIGHTS
Aug 16: - Paid maiden dividend 1.5 cps. *
Nov 16: - Systems upgrade - Finpower Connect (Latest Version) *
Jan17: - Raised $3.1m additional professional Investor funding to build cash
reserves. *
Mar 17: - 1 Branch, $84m of Assets and 34 staff.
Apr 17: - Quest appoints Janssens Insurance to distribute its products.
*
Geneva Finance Ltd Pre-Tax After Tax
Audited Profit $000 $000
Mar 14 Audited (4.2) (4.2)
Mar 15 Audited 1.5 2.2
Mar 16 Audited 2.4 54% 3.5 61% *
Mar 17 Unaudited 3.8 59% 5.1 45% *
LISTING ON THE MAIN BOARD
Exploring the options in respect of moving to the main board
Minimum criteria is $50.0m Market Capitalisation
Market Capitalisation is a function of PERCEPTION
PERFORMANCE
PERCEPTION:
Historically, Geneva has NOT actively promoted itself to the Investment
community
PERFORMANCE:
Maintaining profit growth patterns of the last three years would see the
market capitalisation grow through the
$50m threshold.
Geneva Finance
investments@genevafinance.co.nz
End CA:00301227 For:GFL Type:MKTUPDTE Time:2017-05-16 15:17:52