Published 21 December 2007
Instant Finance NZ Ltd (founder, chairman & major shareholder Nigel Nausbaum), one of New Zealand’s longest-established personal loan providers, has doubled its profit for the September half to a $2.45 million net surplus after tax.
Chief executive Richard de Lautour said the performance for this half-year “shows that profitability has been restored in line with historical levels.
“The profit result was driven by strong lending activity, made possible by Instant Finance’s access to substantial wholesale funding resources and confidence in the ongoing level of investor support. A marked decrease in impaired-asset expense was also a contributing factor.
“Unfortunately further industry failures over recent months have had an adverse impact on investor confidence and, as a result, Instant Finance intends to conservatively manage its lending activities in the second half of the year. While this policy will have some impact on profit, the full-year profit performance is expected to be significantly up on the March 2007 result.”
The company has been in business for 35 years and Mr de Lautour said it continued to maintain a strong balance sheet, with shareholders’ equity of $17.47 million representing 20.7% of total assets. Loan receivables were up 3.6% from $67.39 million to $69.84 million. Total liabilities amounted to $66.8 million.
Instant Finance operates 18 branches throughout the North Island, has over 19,000 active loans and employs 125 staff.
Mr de Lautour explained a key difference between Instant and others in the finance industry which were struggling: “Unlike some in the industry, and particularly property financiers, Instant Finance’s loan portfolio generates significant weekly inwards cashflows, as all the loans are for relatively short terms and on a full principal-&-interest repayment basis. Over the next 12 months, forecast cash inflows are $59.4 million while outflows are $45.6 million.
‘Whilst all key internal performance indicators are positive, it is particularly frustrating that a lack of investor confidence in the finance sector prevents the company from taking advantage of the considerable organic & acquisition growth opportunities presently available.”
Instant Finance has a B3 investment grade rating from Axis Ratings Ltd, which it has maintained since 2004. The company has a committed 3-year $30 million facility from Fortress Credit Corp, which can be extended to $50 million for a further 2 years at the company’s option.
Instant Finance also announced yesterday it had appointed John Bishop as a second independent director on 1 November. Mr Bishop is a qualified chartered accountant with extensive industry experience and was general manager of commercial & business banking at ASB Bank until 2003.
29 October 2006: Instance Finance renews B3 rating
Attribution: Company release, story written by Bob Dey for this website.