New loans of $297 million for the six-month period to March 31 is the second-best figure in MTF Finance’s more than 50-year history.
The Dunedin-based company released its results for the first half of financial year 2022 yesterday, saying the sales growth was pleasing as it came at a time when credit demand was contracting.
The company’s market share recorded positive gains in the first half since the Law on Credit Agreements and Consumer Credit came into force, as other companies found it more difficult to implement implement compliance changes in a timely manner, it said in a statement.
The first half of the year saw the pilot and/or launch of new products with the aim of providing franchisees with additional unsecured products and rejuvenating the dealer market.
Coupled with the start of core technology investments and the creation of a new personal loan product, operating expenses increased as previously reported.
This affected after-tax profit, which fell slightly 2.5% from the same period last year to $4.3 million.
This short-term effect was anticipated as part of the longer-term transformation of the business that the board began last year, MTF said.
Underlying after-tax profit fell 28% to $2.87 million, in line with expectations.
Total amounts paid to shareholder originators, including commissions, fees and waiver of payment, decreased 3.9% to $34.7 million.
Commissions paid to shareholder originators decreased by 1.1% to $22.2 million.
Expenses increased 25.2%, primarily due to factors aligned with business strategy and self-reinvestment for growth.
The year-over-year increase was inflated as the company took steps to reduce expenses in previous periods to overcome the initial shock that Covid-19 sent to the economy, the increase pre-pandemic representing 12.7%.
“The pandemic has not strained our business in the manner originally anticipated and now is the time for us to advance our strategic intent, while remaining mindful of our initiating shareholders’ need for cash flow certainty. “, said the company.