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Dominion Finance Shares After Lower Profit

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, May 14 NZPA - Finance company Dominion Finance Holdings has reported a 36 percent drop in annual net profit.

Net profit after tax was $8.95m for the year to March compared to $13.9m in the previous year, which the company signalled in March it was expecting roughly again this year.

However, the bottom line was affected by a 10.1 million write-off in bad debts and a decision to retain $7 million for contingencies.

Dominion Finance has two operating subsidiaries, Dominion Finance Group Limited and North South Finance Limited.

Shares in Dominion Finance have dropped 8c to a year low of 80c, down 9 percent.

Despite the much lower than expected profit, revenue was up 18 percent. Total revenue was $80.8 million compared to $68.7 million.

The company's reinvestment rate for the year was just under 40 percent, sinking to below 20 percent in April after the demise of industry counterpart Lombard Finance.

"This has since increased but any further destabilisation is likely to push this rate down again," chairman Rick Bettle, said.

Chief executive Paul Cropp said the reinvestment rate was important but not vital to the company's survival as it had enough assets to cover its liabilities.

The company declared a 1c per share fully imputed dividend, saying it was prudent to retain cash in the business as a contingency measure.

It will reward its shareholders with a one for 20 pro rata bonus share issue.

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