NZ Finance Holdings profit jumps 71%

Mortgage broking and finance company New Zealand Finance Holdings has reported a 71% jump in annual net profit to $2.8 million for the year ended March 31, beating its own December forecast by nearly $300,000.

Saturday, April 23rd 2005, 9:12AM

by Jenny Ruth

"We had a good run in towards the end," says managing director John Callaghan. "Our group continues to grow and develop. Being a bean-counter from way back, I’m quite conservative in my approach."

The company’s operating revenue nearly doubled to $12.5 million while per-share earnings rose from 2.6 cents to 3.8 cents.

The previous year did not include any contribution from New Zealand Mortgage Finance which was acquired on March 31 last year.

Chairman Richard Waddell says all divisions performed well. "The group is looking forward to the year ahead with its focus being on growing its distributions channels and continuing to develop products and services to offer through these," Waddell says.

The company finalised its purchase of Approved Mortgage Brokers on April 5, giving it two broking brands.

The company’s shareholders’ equity rose from $3.2 million to $10.9 million during the year. That was due firstly to its $1.65 million initial public offer in October last year, made at 30 cents a share, and then a $2.65 million share placement in February to the Huljich family which now owns just on 10%.

Shortly after that placement, made at 53 cents a share, based on where the shares were trading at the time, NZ Finance’s shares started surging, closing on Friday at $1.05, giving the company a $76.7 million market capitalisation.

This should give Approved’s former owners reason to smile: they reluctantly accepted nearly 2.7 million new shares at a nominal 45 cents each in payment.

Callaghan says a story in the Sunday Star Times highlighting the Huljich family’s involvement seemed to be the cause of the surge.

NZ Finance is currently looking at getting directly involved in securitisation – currently, it manages wholesale funds provided by Australian Mortgage Securities which are raised through securitisation.

"We’re looking for products and services to offer through our distribution channels," Callaghan says. "We’ve got into a position where securitisation is achieveable." The company is looking at providing both prime and sub-prime finance.

NZ Finance isn’t paying a dividend because its policy is to retain all profit for future growth.

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