Profit before commission and fair value movements increased 7.6%, to $23.6m,
a consequence of higher sales volume and growth in finance receivables.
Commission paid to shareholder originators increased 9.7% to $18.2m. Total
amounts paid to MTF originators, including commission, fees and payment
waiver, increased 25.2% to $32.4m.
Unrealised gain on fair value of financial instruments totalled $0.6m,
compared to a ($1.3)m loss for the same period last year, giving a net profit
after tax of $4.4m (31 March 2016: $2.9m, 30 September 2016: $7.2m).
Underlying profit after tax, which removes the volatility of unrealised fair
value movements, providing a more consistent and meaningful measure of
company performance after commissions, decreased 3.4% to $3.7m (31 March
2016: $3.8m, 30 September 2016: $7.9m).
Sales have increased 36% from the same period last year due to a number of
factors including a buoyant economy, record vehicle sales and the release of
a non-recourse lending option to MTF originators. The car lending market
generally remains very competitive and it has been very pleasing to achieve
growth in market share, measured by PPSR registrations, from 11.4% to 12.9%
for the period ending 31 March (31 March 2016: 11.4%, 30 September 2016:
11.9%).
Operating expense, excluding bad debt, as a percentage of assets under
administration remained consistent at 2.7% for the period (30 September 2016:
2.8%).
In November we informed you of a partnership with Turners Ltd to provide a
non-recourse offering to our originators. The product was introduced
primarily to provide motor vehicle dealer originators an alternative way of
supporting the company they own and reflects the changing appetite this
market channel is developing towards credit risk. It will also provide
franchise originators a product to supplement their recourse ledger and
provide a mechanism to balance out the risk of their portfolio in line with
their individual risk appetites.
This partnership allows all MTF shareholders to benefit from Turners'' ledger
management experience, without taking on the credit risk or MTF needing to
resource a new team to manage this ledger. A pilot was launched in early
December with a progressive roll out from January once the lessons from the
pilot were applied. The uptake has significantly exceeded expectations with
sales exceeding $25m since 1 December 2016 and presents exciting
opportunities for the future.
The motor vehicle industry has been experiencing record new and used vehicle
sales and, with a 5.9% increase in the first quarter of 2017, show no
immediate signs of slowing. Throughout this sustained boom MTF has been able
to increase its share of the finance market while continuing to provide
exceptional returns to its originators and shareholders with commission,
return on equity and dividend returns remaining at levels superior to many in
the industry.
The board and management are confident a focus on delivering outstanding
service to customers and originators will enable MTF to grow its share of a
highly competitive market.
For further information, please contact:
Glen Todd
Chief Executive Officer
t: 03 474 6370
e: gtodd@mtf.co.nz
End CA:00301498 For:MTF Type:INTERIM Time:2017-05-22 09:57:48