Published 26 August 2008
Marac Finance Ltd increased net profit after tax by 5% to $25.9 million for the June year, on net operating income up 17% to $70.2 million.
Managing director Brian Jolliffe said the Pyne Gould Corp Ltd subsidiary’s operating costs:net operating income, at 37%, were up marginally on last year.
“While investors generally have become more reluctant to invest in finance company offerings, Marac Finance’s reinvestment rate was maintained at normal historical levels of around 63% in the year under review.Standard & Poor’s reconfirmed the company’s investment grade credit rating.Mr Jolliffe set out Marac’s strong points in the current market:
The securitisation programme it began in August 2007 has provided a new funding facility of $300 millionIt finalised a new $480 million syndicated bank facility with all of New Zealand’s major banks, an increase of $80 million on previous individual facilitiesAfter balance date, a 5-year secured bond programme raised $104.2 million, providing greater diversification and increasing liquidity further.
Mr Jolliffe said: "Marac Finance’s liquidity was $250 million at 31 July. This is a much higher level than the company traditionally holds, but in the current difficult market environment is considered to be a prudent step."Total financial receivables rose 8% to $1.3b billion: “This is a slower growth rate than in previous years and all occurred in the first half. In the second half of the year Marac Finance focused on meeting the needsof existing clients and foregoing some growth opportunities. Finance receivables continue to be well spread, both regionally and also by the type of asset financed.“Instalment loan arrears to total receivables remained relatively constant at 0.5%. Collectively impaired assets, which are assets with an increased risk on collection, increased from 8.1% to 11.7% of total finance receivables. Individually impaired assets, being those which the company believes will not be collected in full, amount to 1.6% of total finance receivables and are fully provided for.Impaired asset expense was $5.7 million in the current year compared to the low $1 million last year.”
Attribution: Company release, story written by Bob Dey for this website.