MTF Finance has signaled a record sales year as a result of launching new products have helped grow the company’s profit after tax by 5 per cent for the year ended 30 September 2022.
Sales were up 10.9 per cent year on year to a record $607 million, with the second half delivering strong momentum and September delivering a record month.
“MTF Finance’s strategy to diversify into personal lending, to reinvigorate the dealer channel, continue to support strong franchise growth and develop new partnerships to reach new markets is paying off already,” says CEO Chris Lamers.
At the same time, increased investment in the brand has seen loan leads grow 9 per cent and brand preference lift by 21 per cent.
“Over 52 years MTF Finance has developed a proud history of innovation, and we will continue to invest in the business, taking a medium to long-term view on returns. Our research shows that New Zealanders are not getting what they want from traditional finance companies, and our community-based lending model meets those needs,” Lamers added.
“We have increased the investment in growing the reach of our network of 50 locally owned and operated franchises. As well as vehicle dealers and partners through increased marketing, we are now rebuilding our technology stack to improve our customer experience and ability to scale and continue to launch new products.”
The record sales translated into income growth, up 2.9 per cent to $97 million. This has increased net interest income from 18.7 per cent to $23.2 million.
Underlying profit after tax, which removes the volatility of fair value movements, was impacted by the planned increased investment in marketing and technology, down 11.3 per cent to $6.6 million.
While the country is now facing a challenging and volatile economic climate, MTF Finance is well situated to continue to grow its market share in this environment.
“Our community-based model means we live and work in the same communities as our customers. As a result, we know we make better lending decisions, as supported by our market low arrears rates of less than one percent.”
“The MTF Finance Board launched the new strategic direction 18 months ago, and the benefits are already flowing through the top line. We will see these flow through in profit and increased returns to originators over the medium term and set MTF Finance up for another strong 50 years.”
The MTF Finance Board approved a final dividend of 1.85 cents per ordinary share for payment 7 December 2022. Total distribution relevant to the period will be 7.83 cents (2021: 9.80 cents per share) or $1.5 million (2021: $1.9 million).
The Board continues to signal to shareholders of the expectation that dividends are declared at reduced levels as critical investment in the company is made in line with the strategic focus. Maintaining prudent levels of capital is also crucial to our ability to fund our new products and continues to be a driving influence on the Board’s consideration of appropriate distribution.