Published 14 June 2009
Geneva Finance Ltd paid the promised $48 million back to investors, made a loss – but a smaller one – for the March year and improved both its balance sheet & its operating cashflow.
Geneva has revised forecasts made in the April 2008 capital reconstruction document, increasing expected revenue but lowering expected profit, equity & total assets. It had forecast a $2.7 million profit for 2009 but made a $7 million loss. However, the revised forecast shows an expected $1.5 million net profit for 2010 (lower than the original forecast of a $3.2 million profit but a profit all the same).
For the March 2009 year, revenue from ordinary activities fell 14% to $38.8 million but the pretax loss improved by 41%, from $11.2 million to $6.5 million. The bottom line was an 11% improvement, a $7 million loss compared to a $7.9 million loss in 2008. The loss/share improved from 150.5c to 9.34c.
The consumer finance company went from equity of $9.7 million at the start of 2008 to $2.7 million at the end of that year, but improved to $19.4 million in 2009 through the issue of $24.4 million of shares. Finance receivables dropped from $121 million to $79.7 million, taking total assets down from $160 million to $111.5 million.
But the company’s term facility was reduced by $8 million to $34.6 million and repayments reduced debentures to $45.5 million. NTA improved from 13c to 22c/security.
Net operating cashflow rose from $12.5 million to $34.5 million, but repayments to lenders & 4 sets of investor cut the net cash movement from financing activities from a $4.3 million inflow to a $49.6 million outflow.
Geneva said the 2 years’ results weren’t directly comparable because deferred tax assets of $3.1 million arising from tax losses & timing differences weren’t reflected in the revenue statement or the balance sheet.
The company has cut overhead costs by about $12.7 million/year Managing director David O’Connell said in his report: “The normalisation of funding markets will present Geneva with the growth opportunities to increase profitability as New Zealand moves out of recession. While it is expected to take a further 12 months or so for the markets to begin to normalise, it is the board’s view that it is in the interest of all stakeholders to further strengthen the company’s balance sheet sooner rather than later. Attracting new equity will be key to achieving this.”
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Attribution: Company statement, story written by Bob Dey for the Bob Dey Property Report.