Wellington, Aug 25 NZPA - South Canterbury Finance is reporting a 22 percent rise in total assets to $2 billion, " following a solid performance in a difficult operating year".

Net profit before tax (NPBT) for the year to the end of June rose 75 percent over the same period last year to $82.7 million, the company said today.

That included a $40m capital gain from selling a 12.75 percent share of Dairy Holdings in December last year.

Chief executive Lachie McLeod said normalised NPBT was only slightly down from the previous year.

That was solely due to additional holding costs for keeping large cash reserves and a cautious increase in provisioning, to compensate for a declining market, he said.

Bad debt write-offs and provision increased to 1.38 percent of total receivables from 0.83 percent at June 30, 2007. Loan and leasing receivables were up 11 percent to $1.46b.

While market conditions were expected to remain difficult, the budget outlook for the current financial year was still for NPBT of $47m to $50m, Mr McLeod said.

That would be achieved through prudent lending in the heartland areas of New Zealand, where the company was well resourced.

Mr McLeod said that despite turmoil in the finance company sector, South Canterbury Finance had enjoyed good demand for loans from provincial areas. It had established itself as a market leader during the year.

Reinvestment rates had been resilient, averaging 63.7 percent during the past year.

"Meanwhile, we are enjoying the strongest inflows of new investment funds we have experienced in the past two years. We are averaging $4.7m of new funds per week during the 2008 calendar year," Mr McLeod said.

During the past year two successful forays into the listed bond market and a new funding line from the US private placement market had diversified the company's funding base.

South Canterbury Finance also continued to maintain over $400m in cash and un-drawn banking lines.

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