Q3 operating profit a turning point, says South Canterbury Finance

Friday 21st May 2010

South Canterbury Finance, the embattled Timaru-based finance company, says it’s at a turning point after posting an $4 million third quarter operating profit.

One-off costs of $5.2 million produced a $1.2 million net loss for the three months ended March 31.

Chief executive Sandy Maier said the breakeven result was a substantial turnaround from its disappointing first-half report, and included a positive net interest margin of $1.4 million.

Over the period, the finance company owned by Allan Hubbard took a $3 million expense on investment losses, a $1.7 million hit on impairment losses, and made a $500,000 loss on forex movements.

Still, the result excludes contributions from Helicopters NZ and Scales Corp., which Maier says will deliver a “significant improvement” in South Canterbury’s performance.

“The company’s cash position has steadily improved through loan repayments and non-core asset realisations and is now $80 million,” Maier said in a statement.

“Impaired loans are being realised generally in line with carrying values, and no further provisions have been required, but these will of course be reassessed at year end.”

Yesterday, Pyne Gould Corp.’s cornerstone shareholder George Kerr pumped in another $15.5 million into SCF via its parent company Southbury, and it has recovered some $202 million selling past-due loans and non-core assets since the start of the year.

Still, like many other non-bank lenders, liquidity is the major obstacle for South Canterbury Finance with a high level of maturities looming before October when the original government retail deposit guarantee expires.

Businesswire.co.nz

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