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New Zealand Finance Holdings To Go Public

For Immediate Release
31 August, 2004


Financial services company New Zealand Finance Holdings Limited has launched a public offering of shares and intends to seek a listing on the main board of the New Zealand Stock Exchange.

The move is part of an expansion and diversification plan aimed at building on the company's steady growth over the past five years.

The company will offer 5.5 million new shares and 4.3 million existing shares to the public, at 30 cents per share. The original three major shareholders are reducing their shareholdings to meet an NZSX listing requirement. Prior to the issue of the new shares, there were 63,500,001 shares on issue.

New Zealand Finance Holdings is the holding company for wholly-owned subsidiaries New Zealand Finance Limited (NZF) and New Zealand Mortgage Finance Limited (NZMF). The company is based in Auckland and has agents throughout New Zealand.

For the 12 months ended 31 March, 2004, New Zealand Finance Holdings Limited recorded a consolidated net profit before tax of $2,872,819 (after tax $1,868,599). If the offer is fully subscribed, market capitalisation of New Zealand Finance Holdings Limited based on the issue price will be $20.7 million.

Chairman Richard Waddel said over the past five years New Zealand Finance Holdings had achieved a number of milestones, which led the Board to the view that it was now an appropriate time to expand the company's capital base.

In the past five years:

* Total operating revenue has grown from $224,992 to $8,801,352 - an average growth of 157% per annum.
* Net surplus after tax has grown from $10,666 to $1,868,599.
* Shareholders' equity has grown from $989,684 to $4,426,483 - an average growth of 49% per annum.
* The average return on shareholders' equity has been 21% per annum.

Mr Waddel said the success of New Zealand Finance Holdings to date can be attributed to the strong credit culture which has been instilled by the company's executive directors, who have extensive banking and commercial backgrounds.

He said the quality of past and current lending transactions should hold the company in good stead into the future, where changing economic conditions will put pressure on competitors with less robust credit procedures.

Mr Waddel, a former partner and chief executive of Ernst & Young and the current chairman of Pharmac and Kidicorp Group Limited, is one of two independent directors on the NZFH Board. He and Jeff Barkwill, a consulting chartered accountant specialising in corporate financial management, join founder directors John Callaghan (Managing Director), business development and credit specialist Mark Thornton, and Pat O'Connor, until recently the owner-operator of a successful chain of furniture stores.

Mr Callaghan said a prospectus for the offer had been registered, and the offer will open on 8 September, 2004. Closing date of the offer is 1 October, 2004 and trading on the NZSX is expected to begin on 6 October, 2004.

Mr Callaghan said that with the company seeking less than $3 million, the issue has not been underwritten.

"This is about repositioning and raising the profile of the company for our planned growth over the next three years. As a niche mortgage provider we see a number of good opportunities in our market segment and this listing will enable us to continue to develop and expand our market share in New Zealand."

He said NZF's current depositors, who number approximately 2700, would be given the opportunity of participating in the offer through a special mailing next week, and 500,000 shares have been reserved for staff and contractors. There will also be a public pool.

The organising broker is Direct Broking Ltd.


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