Canterbury Building profit drops 45% on dividend payment

Tuesday 1st July 2008

Canterbury Building Society, the South Island lender that boosted its mortgage business by two thirds after acquiring a rival, said full-year profit fell 45% on costs to redeem preference shares.

Net income fell to NZ$880,000 in the 12 months ended March 31, from NZ$1.6 million a year earlier, the company said in a statement. Sales rose 23% to NZ$36 million.

The results included NZ$1.1 million for a one-off dividend payment on its preference shares and increased tax. Operating earnings rose 24% to about NZ$2 million.

CBS Canterbury acquired Loan & Building Society on Feb. 1, helping lift total assets to NZ$561 million from NZ$349 million.

Chairman Gary Leech said excluding the merger, the global credit crunch was the biggest influence on business, hampering the company's ability to accelerate profit growth.

"We see no change from very competitive conditions and continued pressure on margins in the short to medium term," he said.

Shares of Canterbury Building fell 3.2% to NZ$4.55.

By Jonathan Underhill

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