Hanover Finance yesterday reported a 40 per cent fall in half-year pre-tax profit but said the result was "very solid" given market conditions.
Hanover Finance, the largest of four finance companies in Eric Watson and Mark Hotchin's Hanover Group, said its unaudited pre-tax profit in the six monthsto December 2007 was $17 million against $28 million for the previous corresponding period.
"While our top-line profit figure is lower, this is in line with the tighter market conditions and remains a very solid performance," said Hanover Finance chief executive David Bryan.
Bryan said the company was unable to provide figures for net profit after tax or total assets at present.
He noted that banking and finance markets had been affected by adverse conditions over the past six months.
"And this is across the board from debentures through to debt/credit markets, funds management and latterly the sharemarket."
Hanover Finance's debenture reinvestment rate was running at around the 40 to 50 per cent level, he said.
Cash reserves at the December 31 balance date were "just above" $80 million. The company earlier reported cash reserves of $102 million as at the end of September last year.
"We will continue to manage the business judiciously, keeping prudent levels of cash on hand, sticking to our core business, focusing the loan book on quality assets and picking out the best lending opportunities," said Bryan.
Hanover Finance chairman Greg Muir said the result demonstrated Hanover's "resilience and underlying strength".
"In addition to Hanover Finance's strong liquidity, shareholder equity is well above trust deed requirements and the company operates in accordance with stringent prudential and financial standards.
"We believe the outlook remains positive for finance companies that are well-run and have strong governance and management, a consistent record of profit and an international credit rating."
