MEDIA RELEASE
Wednesday 24 October 2007
Dominion Finance Holdings posts another Record Net Profit after Tax of
$9.4million for Half Year
Dominion Finance Holdings net profit after tax is up 33% to $9.4million for the six months ended 30 September 2007
compared to the same six month period ended 30 September 2006.
The profit was generated by the two operating subsidiaries Dominion Finance Group Limited (DFG) and North South Finance
Limited (NSF).
Rick Bettle, Chairman of Dominion Finance Holdings Ltd (DFH) says it is a very pleasing result given the recent
uncertainty for investors in the finance company sector.
“As one of the few finance companies listed on the NZSX the directors and management of DFH have responsibilities to a
number of stakeholders. This results in very good governance and transparency of business which is crucial during the
challenging times the finance industry has faced recently.
“In addition DFH’s ability to draw on decades of business experience, combined with the fact it has no related party
lending and good liquidity management, has further strengthened the company’s position.”
At the AGM in August DFH signaled its intention to secure a Rating by the fiscal year end. After a thorough evaluation
of the options available the Company has engaged Standard & Poor’s to provide a rating.
DFH Chief Executive Paul Cropp said, “While securing a rating is important, our view is that it is just one part of the
picture for a stakeholder to consider and certainly not a saviour.”
In the last six months, net operating revenue was up 14% with the key drivers being interest and fees. Operational costs
were up 10% however the Company maintained a very good operating cost to income ratio which was below 20%.
Although strong demand exists for loans, the negative investor sentiment in the market towards finance companies meant
the DFH Group of companies did not avail itself of many lending opportunities, instead preferring to take a cautious
approach.
“New investment levels have been impacted by the current uncertainty and it is similar with the investment renewals. Due
to the scarcity of funds available, our profit margin is good,” said Mr. Cropp.
Credit quality is consistent and considering the various issues locally and internationally a greater proactive stance
is being taken. DFH remains keen to acquire new investments but the pricing expectations amid investor confidence is
proving a challenge.
The Directors have resolved to declare a fully imputed interim dividend of 5.0 cents per share, up from 4.8 cents last
year. The record date for the interim dividend is 5.00pm 9th November with the payment date 16th November 2007.
Shares on issue 68,109,896
In looking ahead to the full year result, Mr. Bettle said, “Based on the information to hand as at the end of September,
the Company has forecast lower revenue for the second half financial year ending 31 March 2008, primarily due to a
projected slight decrease in Total Assets resulting from the scarcity of funds. However profitability is good, so we are
looking at a 10-15% increase in the Net Profit After Tax result for the full financial year ending 31 March 2008
compared to last years final result.
“The current focus of DFH is to maintain prudent liquidity for the months ahead, build on last years result and enhance
and expand the current business model for lending and funding so we can be well placed to fulfill our planned growth in
the years to come.”
Key Highlights
• Net Profit after Tax for DFH, the Group holding company for the six months ended 30 September 2007 was $9.4
million generated from the two operating subsidiaries Dominion Finance Group Limited (DFG) and North South Finance
Limited (NSF).
• Total revenue for DFH for the six months to 30 September was $40.5 million.
• Total Assets of DFH as at 30 September 2007 were $512.8 million.
• Total Liabilities of DFH as at 30 September 2007 were $460.7 million
Operating Subsidiaries (For the six months ended 30 September 2007)
Dominion Finance Group Limited (DFG)
• DFG Net Profit after Tax was $7.4 million ($5.6 million to September 2006) – an increase of 31%
• DFG Total Revenue was $28.0 million ($21.1 million to September 2006) – an increase of 33%
• DFG Total Assets increased to $335 million ($292 million as at 30 September 2006) – an increase of 15%
• DFG Total Liabilities as at 30 September 2007 were $293 million ($256 million as at 30 September 2006) – an
increase of 15%.
North South Finance Limited (NSF)
• NSF Net Profit after tax was $3.4 million ($2.7 million to September 2006) – an increase of 26%
• NSF Total Revenue was $12.3 million ($10.8 million to September 2006) – an increase of 13%
• NSF total Assets increased to $147 million ($138 million as at 31 March 2006) – an increase of 7%
• NSF Total Liabilities as at 30 September 2007 were $130 million ($123 million as at 30 September 2006) – an
increase of 6%.
Financial information in this release has been extracted from the unaudited interim financial statements ended 30
September 2007 which have been prepared along with the comparatives to 2006 under NZIFRS.
A copy of today’s Media and Broker Presentation made by Mr. Bettle and Mr. Cropp will be available shortly on the
company’s website www.dfh.co.nz
ENDS