Geneva Finance to pay maiden dividend in special distribution next month
Geneva Finance [NZAX: GFL], which reverted back to its old name last month, will pay a special dividend after overhauling the business to achieve sustainable earnings and consolidating its shares in an effort to boost their value.
The Auckland-based financier will pay a dividend of 1.5c a share on August 19, shedding rights to the payment on August 11, it said in a statement. The distribution will be the first to shareholders who agreed to convert some of their debenture stock into equity as part of a 2007 moratorium on interest repayments when it owed $132.4 million to investors.
The finance company was one of the few to survive its moratorium, repaying $169 million, including $42 million of interest, as it slashed staff numbers and closed operations. It has generated a profit in the past two financial years and undertook a seven-for-one share consolidation last month in an effort to lift the share price, which last traded on the NZAX at 48c.
"Since the company exited moratorium in August 2013, the combination of the new funding facilities (August 2013), the successful rights issue (May 2014) and a lot of hard work from all the staff, have put the company in a position where it is able to deliver ongoing and sustainable profitability," managing director David O'Connell said. "The March 15, $2.5 million profit was satisfactory but having delivered a 61% increase on that result in the March 16 year, the directors considered that the company is now well placed to begin passing on some of these benefits to shareholders."
The lender specialises in car and personal loans of up to $50,000 and also operates insurance and debt collection services. It draws most of its funding from a securitisation facility with Westpac Banking Corp. That facility was reviewed in June last year and extended through to July 2017.