MTF lifts full-year sales, underlying profit falls as market share slips
Motor Trade Finance says it will attempt to woo auto dealerships with new technology and non-recourse loan products such as it arranged with Turners after acknowledging a loss of market share in its latest year and a 2.3% decline in profit.
Based on registrations on the government's PPSR registry, MTF's market share fell to 11.6% from 11.9% as at September 30, 2015. MTF has two business streams, its network franchise started in 2007 and a finance company for auto dealerships, which is 40 years old. The franchise channel "is experiencing strong growth and profitability" but the dealerships, MTF's traditional distributor, had drifted away.
MTF said it aimed "to reignite support through this channel" with measures including offering non-recourse loans for the first time under contracts written by Turners, a partnership that was announced earlier this week.
Total assets increased 5.3% to $30 million, which it attributed to "strong second-half sales, with finance receivables accounting for the increase," it said.
Turners chief executive Todd Hunter said this week that he was optimistic the two-year programme, which was backed by Bank of New Zealand, would be rolled over.
Profits before commissions and fair value movements edged up 0.4% to $45.4 million, which the company said reflected favourable sales growth and a growing asset base.
Commissions to shareholder originators rose 2% to $34 million, the company said. Total amounts paid to MTF originators, including commission, fees and payment waiver, increased 4.7% to $54.1 million.
MTF's $40 million of NZDX-traded perpetual notes were quoted at $62 per $100 face amount, and carry a coupon of 4.47%.