By Pattrick Smellie
June 28 (BusinessDesk) - Specialist commercial lender UDC Finance increased first-half net profit 6 percent but sees slower growth in lending in the period ahead as the economy cools.
Net profit climbed to $34.7 million for the six months to March 31, from $32.7 million a year earlier. Total revenue for the period lifted 11 percent to $73.4 million and total lending stood at $3.3 billion at balance date, from just over $3 billion a year earlier.
"Continued consumer and business investment in motor vehicles, plant and machinery" drove that growth "during a period of more caution in the New Zealand economy," chief executive Wayne Percival said.
“Businesses are approaching investment in new equipment and vehicles with more consideration. The prospects for many of the key industries we focus on, such as forestry, road transport and the construction sector remain positive."
Inquiry levels at last month's National Fieldays also reflected "a sound outlook for the broader primary sector,” Percival said in a statement.
UDC said provision expenses for the period totaled $7 million and there were "no individually significant write-offs."
Net cash inflows at $188.0 million were considerably down on the comparable period, which showed net positive cashflow of $232.0 million.
UDC, previously earmarked for sale by ANZ, earlier this year stopped taking new investments and said it would repay its secured debentures as part of a review of its funding sources.
In notes to its half-year accounts, UDC says it is winding up the debenture programme and expects to repay "all existing secured investments in or up to late 2019."
ANZ announced the sale of UDC in January 2017 as part of a strategic effort to simplify the business and focus on the group's core banking activities. But the $660 million sale to China's HNA Group was rejected by the Overseas Investment Office later that year and ANZ's alternative plan for an IPO were also dropped.