Announcement
GENERAL: PGC: PGC - Continuous Disclosure Inquiry
05:22pm
PGC
22/04/2008
GENERAL
REL: 1722 HRS Pyne Gould Corporation Limited
GENERAL: PGC: PGC - Continuous Disclosure Inquiry
April 22, 2008
Elaine Campbell
Head of Market Supervision
New Zealand Exchange Limited
PO Box 2959
Wellington
Dear Elaine
Continuous Disclosure Information to the NZX 22 April 2008
Thank you for your letter of 18 April 2008.
Pyne Gould Corporation Limited (PGC) is pleased to respond to the New Zealand
Exchange Limited's (NZX) general, continuous disclosure inquiry to companies
operating in the finance company sector. PGC has always complied with its
continuous disclosure obligations under the NZX Listing Rule 10.1.1.
You will be aware that PGC has a number of subsidiaries involved in a range
of activities with only MARAC Finance Ltd being a debt security issuer under
the Securities Regulations. As the focus of the NZX enquiries are finance
companies generally the disclosures made below relate only to the MARAC
Finance group companies (MARAC).
We observe that full disclosure of PGC's and MARAC's financial position was
made to the market on 26 February 2008 and considering the test under the
definition of "Material Information" for issuers of debt securities under the
Listing Rules, PGC is not in possession of any material information requiring
disclosure to the market. However in the interests of maintaining an open
dialogue on the performance of MARAC, PGC is pleased to discuss and confirm
all the issues raised in your letter.
MARAC's strong financial position was confirmed by results announced for the
six months to 31 December 2007. In particular, MARAC Finance group achieved a
half-year net profit after tax of $14.0m - an increase of 11% over the six
months ended 31 December 2006.
MARAC's focus remains on high quality lending with the result that our
instalment loan arrears remain relatively constant at a low 0.5% of total
receivables. Impaired asset expense was $1.8m, just 0.1% of receivables. No
significant concentrations of borrowings exist with the top five borrowers
accounting for only 6.8% of total finance receivables.
Our reinvestment rates are at near normal historical levels, and new funds
continue to be received on a daily basis. Reinvestment rates for the April
month to date are 64%.
New Zealand's banks are MARAC's largest individual funders. Their support for
MARAC has been recently confirmed by the finalisation of a new $480m
syndicated bank facility with all of New Zealand's major banks. This
facility, together with other existing funding, will provide sufficient
funding and flexibility for the 2008 year and has further increased MARAC's
liquidity.
MARAC's securitisation programme which began in August 2007 provided new
funding of $300m. Securitisation will continue to be a key source of funding
for MARAC into the future.
On 31 March 2008 external reconfirmation as to the sound standing of the
MARAC Finance Ltd business was received when Standard and Poors reviewed and
reaffirmed MARAC Finance Limited's investment grade credit rating of BBB-
long term stable rating.
In concluding, MARAC continues to maintain the features of its business that
mark it as different and are the foundation of our success including:
a broad and diversified spread of assets covering small and medium
businesses, high value consumer goods (average new loan size $20k) and
property;
geographical spread in line with the New Zealand business and consumer
population;
all loans being domiciled in New Zealand and secured against New Zealand
assets;
regular positive cash in flows of $60m - $70m each month;
monthly income for MARAC is circa $18m;
a diversified funding base with securitisation, retail debenture funding and
wholesale bank facilities with a combined total of $1.3b;
an investment grade credit rating from Standard & Poor's;
a strong focus on credit quality which means our instalment loan arrears are
below industry norms;
having no inter-company or related party loans;
a highly experienced and long-serving senior management team.
Yours sincerely
Pyne Gould Corporation Limited
?
Brian Jolliffe
Managing Director
End CA:00163578 For:PGC Type:GENERAL Time:2008-04-22:17:22:27
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