What do people think of NZ Finance?
Jenny Ruth's "first thought was why did they bother?"
Herald Sept 10
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What do people think of NZ Finance?
Jenny Ruth's "first thought was why did they bother?"
Herald Sept 10
Run
Take a closer look lambton at the prospectus. Its a quality company.
Ramper
Please enlighten us on your analysis.Quote:
quote:Originally posted by badger
Take a closer look lambton at the prospectus. Its a quality company.
Badger - welcome to the group - please tell us what you mean
Go to www.shares.net.nz for summary. Then get a prospectus and see forecast cashflow tax expense of $1.3 mill for next year. You have to make $4 mill pretax for this... 33% up on this year. Looks good buying to me.
If u want a financial try NYSE listed FMT
seems to be quite undevalued e.g. PEG of 0.15 PE of 5 etc I assume the undervaluation is an overeaction to the lawsuit.
though must say,I'm not buying, brokerage via asbsec is too expensive and can't be bothered opening ameritrade a/c till i move and get a more permanent home
Another telling factor about the quality of NZ Finance is the very low level of bad debts.
Only $20,000 in four years! Cant see any downside in this IPO.
Why is this better than SPG or DFH if you like small finance coys, which I do ....
More conservative in all respects but still produces a better return on shareholders funds than any of the other finance companies.
Can you give a bit more detail ?
Go to the NZ Finance website www.nzf.co.nz
You will find all the info you want from their prospectus.
Badger I understand what you are saying here and I'm really only poking fun in a devil's advocate manner but when to all extents and purposes bads debts are zero then the downside actually can't get bigger!Quote:
quote:Originally posted by badger
Another telling factor about the quality of NZ Finance is the very low level of bad debts.
Only $20,000 in four years! Cant see any downside in this IPO.
Has anyone read Jenny Ruth's article?
The byline "Why did they bother" was the only negative comment. I liked the follow things;
1, The 3 directors are holding on to 85% of the company so they have an incentive to do well.
2, They have had amazing growth. But this is from a very small base so "amazing" growth won't continue. but it should still grow.
3, They lend to people who are rejected by banks because they don't have a nine-to-fiver. (I speak from personal experience, I get half my income from investments but this doesn't count for banks) These type of borrowers have to pay higher interest. All loans are secured against property.
4, Almost no bad debts.
Had a quick look.
They look like steady operators, with strong banking backgrounds who have gone out and started a finance co and lately purchased a mortgage broking business with the financial backing of Pat O'Connor who is a good guy and major shareholder. They have a niche. Skilled assessment of people that want to buy property but who dont fit the standard criterion yet may still be good credit risks .
Their assessment that they could make things happen has proved correct. As they have been historically successful and well run they are quite able to stand the scrutiny that listing would involve.Good growth and profits.
On the negative side. There are no barriers to entry by competitors.They are very small.Still only .39% of the market with receiveables of only 120 significant loans at about $300k each. Altho profitable they do not propose to pay any dividend for y/e 2005 and are looking for acquisitions with their profits in order to bulk up. For example they have just bought a mortgage broking business that is highly exposed to the property cycle.
I may be wrong but this whole business seems to be heavily exposed to the property market - for better so far. Look at the other threads to see ST views about rising interest rates and slowing down of growth in this sector. It has gone gangbusters for the last few years as has the general economy. Why wouldnt someone like NZF who has niche exposure to it not go well . Mortgage broking the same.
However a slow down in property cycle for the next few years is foreseeable and may slow down the growth and the profits. As there are no dividends paid, this may affect the SP as it has of mortgage brokers in Australia. NTA per share is only about 6-7 cents on a 30 c share so in the unlikely event that things do turn to custard and a receiver and his hungry staff get in you have no safety net.
Badger, you make a return on investment in this company in the next few years only if the Share price goes up. That makes it different from SFG and DFH where even if the share price doesnt go up you still get a good rate of return. What I am not sure about is whether or not the SP will go up and if it did will you be able to get enough of this very small shareoffer to make it worth taking the risk ?
K1wi....I would take a different view in that if the property market slows up there will be more opportunity for NZ Finance because the banks will get even harder to deal with.
ON the SP the directors retain around 75% of the company so it is tightly held. Tight scrip and growth normally translate to one direction for the share price...UP
Thanks very nuch K1w1.
Your comments contain some excellent ideas.
K1W1 what exchange is SFG on
Enigma, sorry it is SGL, Speirs Group on the AX list of the NZX.
Badger, do you have any connections with NZ Finance or those floating it ?
Wish I did K1w1. From memory, and you would need to check their debenture issue, SGL has a very large book but their profits crap.
Gee Badger, so are you planning on getting any ? SFG has low profit because they got Access Brokeraged, someone they did business with put thru a series of deals that appeared to be ok but only because of fraud which was discovered later.
What I like about that is they took it on the chin, didnt make excuses, or fudge their accounting to dress it up.Not only didnt they go under - they still made a profit. Guess which finance co is going to be extraordinarily inquisitive about their customers in the next financial year.
Enigma if you are in Aussie and like small finance co's check out CIY which Dimebag likes, or MFS which is my favourite. Or put your Melbourne Cup winnings on MPY for a long shot.
Thanks for clarification K1W1. I agree with Badger NZ Finance in my opinion a better bet than those two. Would not even deposit money on secured debenture stock with those companies. I have a small amount of first ranking Debenture stock with NZ finance and have found them excellent to deal with.
Don't think access will have any either ;)
k1w1 Dimebag May like CIY but I would not touch it with a barge pole
Long Strangle.....Try ASB Securities and keep trying Direct
If DB are all out, and allocations are becoming hard to source... could one take this as a good sign considering the float is not underwritten?
Sorry if that's the obviously conclusion to be drawn, but I'm new to IPOs.
Isn't it interesting that Badger has posted 8 times on this thread when he has only posted 14 times previously on ST. He states he isnt connected to NZ Finance or those floating it. No answer either on whether he has obtained any allocation of shares.
Isn't life full of spooky co-incidences ?
K1w1....no Im not connected and yes i do have an allocation of shares....you stick to Spiers Finance...I hope their finance profits dont get chopped up with the cabbages in their food processing division...what a combination !
LS and Badger, I don't apologise for asking questions that are relevant. Always check the messenger as well as the message ( though I am not so hard line on it as MacDunk who only believes the tea lady and the truckdriver !)
LS- Badger, who posts rarely, does post intelligently, but they are uniformly positive, I always wonder why someone intelligent can see no negatives about this co. An infrequent poster has done so mostly about this float so I requested disclosure. I am not sure how many he has been allocated, was it just standard retail allocation, or is he connected ?
Badger, no offence intended I just have a nasty cynical nature .
I have ordered 10000 shares. Whether I will get them is a different matter
Brave,if you get them thats not a positive sign. If you don't get them thats not all that positive either.
I always wonder with these ones with the deliberately constricted supply - unless I got a big allocation thru connections:D
K1w1...get yourself some stock ..closing this week altough you might have to employ the ' many smaller apllications technique' to avoid being scaled.
NZ Finance has started trading.
The shares cost 30 cents and they are now at 36 cents.
A tidy profit if you were able to get some. I don't whether I got any or not yet. However the money I allocated for these shares has left my account.
What do you mean "tiny volume"?
There have been 229000 traded before 12:30. That is more than most of NZ's biggest companies.
I have come up with a theory as to what "tiny volume" may mean.
Are you trying to say that most of the punters who got NZF shares before the IPO haven't flogged them off on the first day of listing for a quick profit and that that is unusual as far as IPOs are concerned?
Please correct me if I am wrong.
Strong show for NZ Finance
07.10.2004 By ELLEN READ
New Zealand Finance has made a strong start to life as a listed company, rising four cents to 34c a share on its stock exchange debut.
After hitting 37c, the stock closed last night at 35c a share, giving the company a market capitalisation of just over $24 million.
Most of the financial services company's loans are short-term bridging loans to the residential property market. It also has a mortgage-broking business, NZ Mortgage Finance.
Managing director John Callaghan was "very pleasantly surprised" at the strong start to public trading.
He said there had been a good response to the offer, resulting in heavy scaling - including for company directors.
NZ Finance offered 5.5 million new shares and 4.3 million existing shares to the public, at 30 cents a share.
Established in 1997, the company remains majority-owned by directors Callaghan, Mark Thornton and Pat O'Connor. The share issue means new investors hold just under 15 per cent of the company. The total number of shares on issue is just over 69 million.
The company has a loan book of around $40 million, assets of just over $5 million and made a net profit of $3.5 million in the year to March 31. It will unveil its interim result at the end of the month.
The finance sector has been in favour recently, with a booming housing market and low interest rates.
Mortgage-broking franchise company Mike Pero raised $10 million and listed on the stock exchange in May. In July, Dominion Finance followed suit after a successful $15 million capital raising.
NZ Finance closed at 40 cents today. That is 33% profit in 2 weeks for those who were lucky enough to get some shares in the IPO.
Yep managed to get the mandatory 5000 in the IPO but unfortunately had sold out at 36. Still looks like this baby could go on a bit.Quote:
quote:Originally posted by rmbbrave
NZ Finance closed at 40 cents today. That is 33% profit in 2 weeks for those who were lucky enough to get some shares in the IPO.
Reasonably illiquid if founders not looking to sell and some unsatisfied demand out there.
It will get high enough soon for the suckers to be attracted in.
Think Strathmore.