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Motor Trade Finances (MTF) said the global credit crisis had changed funding for the short to medium term and it was evaluating options for efficient and cost-effective finance.
MTF was formed in 1971 by motor vehicle dealers to finance sales of motor vehicles. Its main source of funding is a securitisation programme set up in 1995.
MTF yesterday reported profit after tax and before perpetual preference share dividends of $3.717 million in the year to September 30. Last year it made a loss of $1.158 million.
New loan sales were $442.6 million compared with $454.7 million last year.
"Sales were better than expected, but we can expect volumes to drop significantly in the coming year, as vehicle sales slow," MTF said.
Transacting shareholders received $46.1 million through their participation in MTF, including $13.4 million in fees and payment waiver premium, paid directly. Last year they received $47.6 million.
MTF has tightened credit criteria and it said its margins were volatile.
The company's cost of funds has risen by 44 basis points. At a special meeting on October 29, transacting shareholders voted to support a restructuring proposal, which included the issue of further shares, capitalisation of undistributed profits as bonus shares, cancellation of registration under the Co-operative Companies Act 1996 and the adoption of a new constitution.
If the share offer is successful, and following the bonus issue, MTF will have total capital of about $60 million, including perpetual preference shares of $39 million.
TURNERS AUCTIONS SALES FALL
Turners Auctions, the largest auction house in New Zealand, has experienced a 22 per cent fall in sales of used imported vehicles in the year to date.
The company yesterday forecast a net profit after tax in the year to December of $1 million.
Last year it reported a $2.274 million profit. The company cited difficult trading conditions as the cause.
"The 22 per cent year-to-date decline in sales of used imported vehicles has significantly affected both the Turners Fleet result as well as that of other major suppliers to the auction business."
- NZPA
