Strategic Finance reports strong profit of $22.8 m

Media Release
31 August 2006

Strategic Finance reports strong profit of $22.8 million

Strategic Finance Limited has today reported an audited net profit after tax of $22.8 million for the year ending 30 June 2006. This compares with last year’s net profit after tax of $25.5 million (This result was boosted by advisory fee income from two significant transactions).

“After allowing for last year’s extraordinary income, our profit in the current year continues the trend of the company achieving robust year on year growth,” chief executive Kerry Finnigan said.

“Strategic Finance has once again reiterated its top tier position among local finance companies. We have had a solid year with steady growth and strong support from investors and borrowing clients,” Mr Finnigan said.

Total assets grew 26 percent to stand at $498.7 million as at 30 June 2006, up $103 million at the same time last year.

“All operations performed remarkably strongly during a challenging year for the rest of the industry. The benefit of maintaining focus on credit quality and high standards in corporate governance contributed to a sound result,” Mr Finnigan said.

“During the period we have introduced Allco Finance Group* as a cornerstone shareholder, along with a $75.0 million banking facility from Bank of Scotland which has augmented our already strong liquidity position."

Strategic Finance’s total liabilities - predominantly depositors’ funds - grew by $101 million or 29.5 percent to $439.1 million. Shareholders’ funds rose four percent to $59.7 million.

Strategic Finance’s gearing ratio of 11.76 percent remained above the finance company sector average of 9.89 percent as measured by the 2006 KPMG Financial Institutions’ Performance Survey.

“The strong equity position, along with our Rapid Ratings B1 rating, is further evidence of Strategic Finance’s superior standing**.” Mr Finnigan said.

During the year minimal bad debts were written off, with a total of just $38,292 in the year to June 30, 2006.

Strategic Finance’s core operation of property finance continued to perform strongly during the year. The Group also enjoyed a strong contribution in fee income from advisory and management services provided to the property and corporate sectors.

This result continues the pattern which has been in place since the company’s inception in 1999 of a strong balance sheet supporting controlled growth in all key areas of the business.

To request a copy of our Investment Statement please contact us on 0800 275 735.

ENDS

The following information is taken from the audited financial statements for the year ending 30 June 2006 for Strategic Finance Limited. The full financial statements are available on request from Strategic Finance Limited or available to download from the news page of www.strategicfinance.co.nz.

30 June 2006 30 June 2005
Net Profit after Tax $22,771,557 $25,573,678
Total Assets $498,721,795 $395,749,947
Total Liabilities $439,097,520 $338,104,518
Shareholders’ Funds $59,624,275 $57,645,430
Net Cash flow $20,368,075 $25,596,960
Related Party Lending Nil Nil
Bad Debt Write Offs $38,292 $73,922

* Allco Principals Trust, which is associated with Allco Finance Group, owns 50% of Strategic Investment Group, the parent of Strategic Finance Limited.

** For more information on Rapid Ratings visit www.rapidratings.com or request a copy of their report from Strategic Finance Limited.

See...
Statement of Financial Performance (PDF)
Year in Review Presentation (PDF, 2.3Mb)

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