UDC Finance half-year profit up 11%
06 June 2017
UDC Finance half-year profit up 11% to $30.2 million
Interim performance highlights
- Net half-year profit after tax of $30.2 million
- Revenue solid at $60.4 million
- Total lending reaches $2.73 billion
- Provision expenses down 61%
UDC Finance continues its track record of strong financial performance, posting a first half-year profit after tax of $30.2 million for its current financial year (1 October 2016 to 30 September 2017).
The net profit growth of 11% on the same period from the previous financial year ($27.3 million) was driven by low provision charges and lending growth across a range of industries.
Wayne Percival, UDC’s CEO, said: “We’re proud to present a solid half-year result during a very important year for our company.
“We’re well positioned as we move into a new period of HNA Group ownership, which will bring more growth and investment to UDC.”
Overall revenue was solid at $60.4 million, reflecting tighter margins and high quality lending. Bad debt provisions were well down reflecting the overall quality of the lending book.
“UDC continues to support the New Zealand economy. Our financial performance reflects our strong customer relationships and a healthy business environment,” Mr Percival said. “UDC is experiencing growth in lending to vital sectors including transportation, construction and forestry.
“Business confidence has flowed through to consumer lending too, with lending through car dealerships growing by 37%. New car sales are strong and UDC remains the preferred motor vehicle finance partner.”
Focus on cost control restrained total expenses to a 3% increase, and the cost-to-income ratio sat under 27%, representing no change from the same period in the previous financial year.
“With our disciplined approach to financing and strong customer relationships, we will continue to support and grow with our customers,” Mr Percival said.
About UDC
UDC is New Zealand’s leading asset finance company, and has a Standard & Poor’s* credit rating of BBB.
On 11 January 2017, it was announced that HNA Group had signed a sales and purchase agreement to buy UDC Finance from ANZ. The sale is expected to be completed in the second half of this year. It is envisaged that on completion of the purchase, UDC will sit under and report to Global TIP Holdings, an HNA subsidiary and Europe’s leading trailer leasing business.
HNA sees significant potential for growth in the market leading New Zealand business and intends to preserve UDC’s operations, including offering ongoing employment to UDC employees and maintaining existing customer lending.
*Credit ratings issued by Standard & Poor’s Ratings Services are solely statements of opinion and not statements of fact or recommendation to purchase, hold or sell any securities or make any other investments decisions. Latest ratings can be found at www.standardandpoors.com
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