MTF reports full year profit of $8.2 million

Profit after tax was $8.2m (30 September 2012: $4.6m)

Profit before commission and other gain (loss) is up 13%, to $39.3m, resulting from strong interest margin, asset growth and funding efficiencies.

Operating expense, excluding bad debt, as a percentage of assets under administration, improved to 2.89% (2012: 3.01%). Administration expense increased 27%, including $1m of legal fees incurred in the defence of High Court proceedings brought by the Commerce Commission. Bad debt written off totalled $0.3m (2012: $1.4m).

Total assets increased by 8% or $31.7m, on the back of improving sales. Net interest income, as a percentage of finance receivables, remains healthy at 10.8% (2012: 10.3%). Growth in finance receivables was funded through securitised borrowings, which increased $32m to $350.1m. Securitisation facilities increased $53.4m to $395.5m, with $43.9m undrawn at year end.

Capital, as a percentage of total assets, has remained steady at 17.5% ($77.1m) and is sufficient to underpin projected growth over the near term.

Arrears held steady at targeted low levels during the year and, at 30 September 2013, 31+ day arrears stood at 0.60% (2012: 0.60%),reflecting the continued focus on quality lending, best practice origination and active management.

We continue to develop market leading technology to deliver our originators a complete desk-top finance offering. We took steps during the year to deliver this vision, with the completion of a number of major projects, including development of a new web based origination system, and the launch of smartphone and tablet applications for customers and originators.

We expect demand for new and used vehicles to continue to improve, as domestic economic and labour market conditions improve. Business and consumer confidence continues its slow recovery, has broadened beyond the Canterbury region, and will drive an increased appetite for credit.

The board and management are confident that market leading technology, secure funding, and a focus on outstanding service, to customers and originating shareholders, put MTF in the position to take a greater share of a recovering market.

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