Allan Hawkins. Photo / Dean Purcell
Former sharemarket high-flyer Allan Hawkins yesterday outlined the reasons why his finance company, Cynotech Holdings, has not been hurt by the finance sector's woes.
Hawkins - chairman, chief executive and a major shareholder in Cynotech - told shareholders at a special general meeting yesterday that current conditions were
actually quite favourable for his firm.
"Quite simply we have not had a finance group prospectus and we have not been taking deposits from the public.
"Therefore we have not had to deal with investors wanting their money back as the confidence in the finance sector has been undermined."
Cynotech had only 19 depositors, "and they are all well known to us".
The company's annual results are due out around February 29. Hawkins said profit would be up on last year's figures but, "in comparison to our own budget and plan figures", had been held back by a more cautious approach in the second half.
He said Cynotech was one of the few smaller finance groups still lending, and loan demand had been significant in recent months.
Last year Cynotech bought the loan book of National Finance, which collapsed owing $25 million. Cynotech paid $7.7 million to buy the $23 million loan book and has already recovered around half the $23 million.
Hawkins forecast more storm clouds for the finance sector, and for the property development sector which was starting to hurt as finance companies pulled the plug on their credit facilities.
He noted Cynotech had still not been able to grow its receivables at levels planned for this year.
"We had planned to issue a debt prospectus but market conditions have superseded that plan."
He said the company had not felt it could go back to shareholders for a rights issue at the present time, so it had proposed a preference shares issue. Shares in Cynotech were down a cent to 22c.
- NZPA
