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GFNZ boosts annual profit 61 per cent

NZN 13/06/2016 Paul McBeth

GFNZ Group lifted annual profit 61 per cent as the finance company, formerly known as Geneva Finance, grew the size of its loan book while widening margins in a low interest rate environment.

Net profit rose to $3.5 million, or 0.73 cents per share, in the 12 months ended March 31, from $2.2m, or 0.48 cents, a year earlier, the Auckland-based firm said in a statement.

That gain was principally from GFNZ's Geneva Financial Services, which grew its loan book by 26 per cent to $48.8m.

At the same time, it widened its margins, generating $5.8m of net interest income, or 63.3 per cent of total interest income, compared to $3.4m, or 52.7 per cent of total interest income, a year earlier.

"This has been a pleasing year for the group and we are highly satisfied with the results, which position us well for the future," managing director Ged O'Connell said.

"The profit improvement and conservative balance sheet ensures the group is ideally placed for further growth opportunities, both organically or by way of acquisitions."

GFNZ was one of the few finance companies to survive the sector's collapse last decade, freezing interest payments on its debenture stock in November 2007, when it owed some $132.4m to investors. Those investors have since been repaid, including $40m in interest, as the lender slashed staff numbers and closed branches around the country.

The firm, which also operates insurance and debt collection services, specialises in car and personal loans of up to $50,000, and draws most of its funding from a securitisation facility with Westpac. That facility was reviewed in June last year and extended through to July 2017.

The NZAX-listed shares last traded at 5.6 cents, down 20 per cent so far this year, and valuing GFNZ at $27.6m.

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