Successful Implementation Produces Solid Results

News Release 16 October 2006

Successful Strategy Implementation Produces Solid Results for Geneva Finance

Geneva Finance Ltd has reported an increase in net profit after tax from $2.2 million to $3.8 million for the year ended 31 March 2006.

Managing Director, Glenn Walker, said while the company had increased its revenues from $21 million to $39 million, and its operating profit before tax from $1.6 million to $5.7 million, it was committed to adopting a measured and cautious approach to the business.

Standard & Poor’s Ratings Services has also just affirmed the company’s ‘B+’ long-term counterparty credit rating, with outlook stable.

The announcement of Geneva’s results coincides with the release of the company’s latest prospectus and its S&P rating.

Transparency and a sound management structure were instrumental in securing Geneva Finance a $30 million international bank line from the Bank of Scotland International (Australia) recently.

Walker said the funding from the Bank of Scotland International (Australia) was a reflection of confidence in the company’s rigorous risk management systems, policies and processes – and Geneva intends to strictly maintain those processes.

“Recent finance industry events have highlighted the need for industry participants to tightly manage their businesses. This market stress is one of the reasons we have sought the S&P rating – it’s a confidence issue for the market, but it also reflects our own commitment to where we are going.”

Walker said a diversified product range, a strengthened senior management capability and the imminent conclusion of the company’s first five year plan had created a strong business platform for a successful year.

Loan Receivables grew to $110,880,189 (from $54,624,873 the previous year). Total Assets grew to $142,251,320 (from $63,518,501 the previous year).

“Over the past year Geneva has expanded its range of financial products and services to include home loans, commercial asset finance and a full range of insurances, as well as its Galaxy on-call and savings accounts at highly attractive interest rates.

“Geneva has also increased its range of customers, and now offers a full range of products and services aimed at homeowners.”

Walker said an expanding market position; a strong revenue, cashflow and profitability base; good cash reserves and liquidity; and a significant business infrastructure and capability put the company in a strong position.

“Our network is now nationwide, including Christchurch. We have 22 branches in New Zealand, together with a national network of retailers, vehicle and commercial asset dealers and our own sales force, which provide Geneva with a strong distribution network for our financial products and services.

“Geneva has established a significant business and management infrastructure. Scale is important in attaining risk management capability, which is vital to success in the finance market. There is consolidation amongst those that do not have scale as they struggle to adapt to a changing business, industry and regulatory environment.”

Geneva Finance has also almost completed the implementation of its first five year plan.

“Key elements of the plan were to establish the business infrastructure, systems, policies, distribution and management capability to be able to manage risk effectively and to develop a significant market presence and a strong platform for growth.”

The recent strengthening of the senior management team has been instrumental in ensuring Geneva Finance has a robust management with an important stake in the prosperity of the business.

“Management own 50 per cent of the company's shares – so we have a vested interest in the performance and management of Geneva. This is hands-on management.”

Recent appointments - to capitalise on the prospects for growth ahead – include the promotion of Dennis Kelly to the position of Chief Executive Officer to reinforce the company’s executive management structure.

In addition Shaun Riley has been appointed General Manager to work with senior management to implement business strategies and head up the company’s branch operations management team, while former Redpaths New Zealand Ltd Managing Director and owner, David O’Connell, takes up the post of Group Chief Financial Officer.

Walker said Geneva Finance’s S&P rating is a medium term process for the company to continue to strengthen its financial performance and position, its risk management capability and broader market position.

ENDS

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