Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Dorchester Pacific adds Oxford Finance to its growing stable

Dorchester Pacific adds Oxford Finance to its growing stable

By Suze Metherell

March 17 (BusinessDesk) – Dorchester Pacific, the finance company that avoided failure in 2010 by convincing investors to accept a debt-for-equity swap, will acquire Levin-based lender Oxford Finance.

The Auckland-based firm expects to pay between $11.3 million to $12.3 million on acquiring the North Island car finance specialist, depending on Oxford’s pre-tax operating earnings for the year ended March 31 2015, Dorchester Pacific said in a statement. It will fund the acquisition using retained earnings and proceeds from a 2013 capital raising.

Dorchester Pacific got a new lease of life in 2010 when Auckland private equity outfit, the Business Bakery, got involved with a recapitalisation plan in which some 7,200 investors owed about $84 million converted their debenture stock for four different types of security to keep the firm afloat while many other finance companies were failing in the wake of the global financial crisis and a local recession.

Acquired by Levin’s electricity lines company Electra in 2003, Oxford had grown the value of its loan book to $50 million and will boost Dorchester Pacific’s total loan book to a value of around $90 million.

Oxford has reach through Wellington, the Wairarapa, Taranaki, Hawkes Bay, Waikato and the Bay of Plenty, with 75 percent of its book tied up in motor vehicle financing and the remainder in consumer loans.

The acquisition is the latest in a series by Dorchester. Last year the company upped its holding in Turners Auctions to a cornerstone stake and in 2012 it bought Napier-based debt collection agency EC Credit for $18.5 million in cash, stock and earn outs.

Oxford Finance has “scale to boost group earnings quite significantly and there is a low integration risk,” said Grant Baker, Dorchester’s chairman. “We have acquired the business on a similar earnings multiple to our EC Credit acquisition and we are very comfortable with the value proposition.”

It expects Oxford Finance will contribute $3 million to annual earnings, boosting forecast annual net profit to between $10 million to $11 million in 2015, and up to $15 million the following year. Last November the company gave annual guidance of $6 million trading profit for the period ending March 31.

Shares in the NZX listed company rose 2.1 percent to 24.5 cents, and have climbed 9.1 percent since Jan 1, although they have fallen 16 percent over the last 12 months, underperforming the NZX All Shares Index’s gain of 9.6 percent.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

China Shopping: NZ-China FTA Upgrade Agreed Among Slew Of New Deals

New Zealand Prime Minister Bill English and China Premier Li Keqiang signed off a series of cooperation deals spanning trade, customs, travel and climate change and confirmed commencement of official talks on an upgrade to the nine-year old free-trade agreement between the two countries. More>>

ALSO:


Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news