Motor Trade Finances posts slight fall in half year profit

Total operating revenue fell to $21.9 million from $22.8 million.

The company said it had written $181.9 million of new business compared with $165.4m for the same period last year.

"We continued our dominance outside the main metropolitan areas and in our Otago-Southland base, with strong growth recorded by dealers in those regions," the company said.

Income distributed to dealers of $16.5 million was 3 percent down on the same period last year, largely due to lower margins and increased expenses.

Shareholders' equity increased to $17.3 million from $8.3 million principally because of a change in accounting standards, which now require that distributions to shareholders be treated as equity, until distributed.

MTF said the outlook for motor vehicle finance companies is forecast to be characterised by decreasing margins and increasing expenses. Margin is decreasing because of competition from mostly bank products, secured over property assets.

MTF said its research indicated that up to 70 percent of motor dealer pre-tax profit was derived from finance and insurance, "the bread and butter business of MTF".

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.