Geneva Finance - GFL

[humvee]

Whats up with Geneva Finance - GFL Today?- Could not see any announcements earlier - but 0 shares traded today from what I can see.......

[traineeinvestor]

GFL is pretty thinly traded at the best of times. I note the controlling shareholder increased their shareholding recently which will (I expect) reduce market liquidity even further:

https://www.nzx.com/announcements/355822

[nztx]

Reading between the lines in their 29 June announcement, I guess no mention of dividend must have been read to mean No Final Div, usually paid around early - mid July

But then out pops today's release at 4.55pm:

https://www.nzx.com/announcements/356104

"The board have resolved to declare a final dividend of 1.50 cents per share. The dividend will be payable on 29th July 2020. The ex dividend date will be 23rd July 2020 and record will be 24th July 2020."

[percy]

Been a long time since anyone has posted on this thread.
Like all finance companies high interest rates have affected their NIM and profit.
This caught my eye.It was from their 27th September presentation.GFL own Quest Insurance.
Financial Overview (Quest Insurance)
Review of March 2023
• Gross written premium up 30% to $39.3m
• Pre-tax Profit down 6%
• Cash on hand increased up 27% to $31.7m
• 5-year revenue average growth rate 51% per annum
• Strong solvency position at year end

Yesterday they announced their interim result.Not flash but was what I expected.

https://www.nzx.com/announcements/422642
Quest Insurance Group Limited (Quest) reported a pretax profit of $3.2m, up 27.1% on the prior period. The good result was driven by continuing the prior year’s premium growth momentum. Premiums were up $3.5m (+18.5%) for the period. The higher interest rates benefited investment income of $0.9m, up $0.7m on last year. Quest operating costs including direct costs were up $1.3m mainly due to investment in staff and IT.

Disc.I have a modest holding.

[Ferg]

Upcoming vote for Geneva Finance as to whether or not they move to the USX:
https://www.nzx.com/announcements/433323

And in other news they have shut down the loss making activities of Stellar Collections, debt litigation & debt factoring to focus on the core activities of lending and insurance. FY24 result was to expectation with a couple of one-offs negatively impacting NPAT for the year:
https://www.nzx.com/announcements/432076

Interesting to see insurance is jumping ahead of lending in leaps and bounds. I am picking 8c NPAT contribution just from insurance in FY25; FY24 was impacted by a one-off tax subvention payment to utilise tax losses from the business units being closed.

Add that to the other initiatives over the past 12 months and at 20c this is trading on a forecast P/E of under 2. Throw in a dividend policy of 35% and the forward yield also looks good.

[whatsup]

Upcoming vote for Geneva Finance as to whether or not they move to the USX:
https://www.nzx.com/announcements/433323

And in other news they have shut down the loss making activities of Stellar Collections and debt litigation to focus on the core activities of lending and insurance. FY24 result was to expectation with a couple of one-offs negatively impacting NPAT for the year:
https://www.nzx.com/announcements/432076

Interesting to see insurance is jumping ahead of lending in leaps and bounds. I am picking 8c NPAT contribution just from insurance in FY25; FY24 was impacted by a one-off tax subvention payment to utilise tax losses from the business units being closed.

Add that to the other initiatives over the past 12 months and at 20c this is trading on a forecast P/E of under 2. Throw in a dividend policy of 35% and the forward yield also looks good.

Agree BUT it will be listing on the " sports " board shortly which have few eyeballs and very little liquidity !

[Ferg]

Agree BUT it will be listing on the " sports " board shortly which have few eyeballs and very little liquidity !
Indeed - assuming the move is approved. Given liquidity is almost zero on the NZX it doesn't really change much....

[percy]

Indeed - assuming the move is approved. Given liquidity is almost zero on the NZX it doesn't really change much....

The upcoming shift from NZX to USX will not as you point out change GFL's liquidity..
However the announcement has created a great deal of liquidity,with the share price collapsing.
USX investors such as myself are certainly loading up the truck.
Clearing the decks of the two poor performing businesses ,cutting costs including NZX fees .should see GFL progress into a great little earner.
Your "PE of under 2 and paying a dividend" has me really excited.

[Rawz]

I went to check GFL out on Sharesies and there is a big sell only banner on it.

Suppose Sharesies don’t want to manage the unlisted bit

[percy]

I went to check GFL out on Sharesies and there is a big sell only banner on it.

Suppose Sharesies don’t want to manage the unlisted bit

A big thank you Sharesies.

[blackcap]

Don't go telling too many people Percy :)

[nztx]

Agree BUT it will be listing on the " sports " board shortly which have few eyeballs and very little liquidity !


just in time to replace another mob who called in the undertakers over there to finalise their ski slope sweep to the bottom off ASX ;)

[nztx]

Don't go telling too many people Percy :)


Are they short on dough to pay up for a lazy NZX deckchair or just getting a bit Frank & Francis about announcements on the ins & outs being too visible ? ;)

[Jaa]

You have to be suspicious of an announcement that states changing exchanges will save money without ever actually stating how much money they will save.

[percy]

JLG Just Life Group Ltd have just moved to USX from NZX.They also did not say how much they would save.I would guess both will save well in excess of $250,000.pa.
Same reasons JLG gave also apply to GFL.
Infrequent trading and low liquidity: With The Harvard Group and its associated
persons controlling over 80% of JLG shares, any trading of shares typically occurs in
very low volumes. Therefore the current NZX listing offers little advantage to
shareholders from a liquidity perspective.
• High compliance and governance costs: Maintaining the Company’s NZX listing incurs
substantial ongoing compliance and governance costs that can be significantly reduced
through delisting.

[Sideshow Bob]

Probably paywalled...

https://businessdesk.co.nz/article/finance/shareholders-association-opposes-geneva-finance-delisting?utm_source=Digest&utm_medium=email

[percy]

Probably paywalled...

https://businessdesk.co.nz/article/finance/shareholders-association-opposes-geneva-finance-delisting?utm_source=Digest&utm_medium=email






I have voted for the resolutions.

[Jaa]

JLG Just Life Group Ltd have just moved to USX from NZX.They also did not say how much they would save.I would guess both will save well in excess of $250,000.pa.
Same reasons JLG gave also apply to GFL.
Infrequent trading and low liquidity: With The Harvard Group and its associated
persons controlling over 80% of JLG shares, any trading of shares typically occurs in
very low volumes. Therefore the current NZX listing offers little advantage to
shareholders from a liquidity perspective.
• High compliance and governance costs: Maintaining the Company’s NZX listing incurs
substantial ongoing compliance and governance costs that can be significantly reduced
through delisting.

Those costs are very valuable to small shareholders.

Literally you are paying for them to communicate with you and for a level of reassurance that nothing dodgy is going on. That and for increased exposure for the company which drives liquidity and the share price.

Without a $$ value it is hard to judge if those benefits are worth the cost.

[percy]

From today's annual report.
I always feel "comfortable" ie "well positioned" with positive outlooks.

"The Board remains positive that the strategic refocus will provide a clearer direction for
the lending business and as a result its performance should improve even under the
current economic conditions. Lastly, Quests continued growth prospects and enhanced
liquidity position provides a positive outlook for the coming year."

[Ferg]

It appears a couple of directors managed to 'pick the bottom' recently with on-market acquisitions:
https://www.nzx.com/companies/GFL/announcements

And the majority shareholder acquired about 1% of shares. [Edit: thanks Percy - I read that notice backwards!]

Fair point Jaa although I note that GFL have stated their intention to keep shareholders informed quarterly which is more than they currently do on the NZX. Also, in moving away from the NZX my reading between the lines in the GFL annual report is they will no longer have to comply with the diversity and ESG requirements per the noted exceptions to the NZX requirements. In their own words they would rather spend that time focussing on making money. At the end of the day the average shareholder wants dividends and returns, not feel good stuff.

[percy]

Federal added to their holding.
For this disclosure,—
(a) total number held in class: 46,507,267
(b) total in class: 72,935,275
(c) total percentage held in class: 63.77%
For last disclosure,—
(a) total number held in class: 45,707,267
(b) total in class: 72,935,275
(c) total percentage held in class: 62.67%
Details of transactions and events giving rise to relevant event
Disclosure is required for the transactions as a result of which (together or alone) result in
a movement of 1% or more in the substantial holding;
Date: 1 December 2020 to 1 July 2024
Nature of transactions: On Market Trades / Share Issue
Consideration: $275,894
Number of Shares: 800,000

[Ferg]

Thanks percy - I completely misread that announcement so I edited my post.

[percy]

At Geneva Finance Limited’s special meeting, held today, shareholders were asked to vote on 2
resolutions, which were supported by the Board.
As required by NZX Listing Rule 6.1, all voting was conducted by a poll.
The resolutions passed by shareholders were:
• Delisting from the NZX Main Board: That the delisting of the Company from the NZX Main
Board is approved and the directors of GFL are authorised to undertake all actions and enter into
any agreements and other documents necessary to give effect to this Resolution.
• List on the Unlisted Securities Exchange (USX): Subject to Resolution 1 being approved, that
the Company list on the Unlisted Securities Exchange and the directors are authorised to
undertake all actions and enter into any agreements and other documents necessary to give
effect to this Resolution.
Details of the total number of votes cast in person or by a proxy holder are:
Resolution For Against Abstain
Delisting from the NZX Main Board:
That the delisting of the Company from
the NZX Main Board is approved and the
directors of GFL are authorised to
undertake all actions and enter into any
agreements and other documents
necessary to give effect to this Resolution.
9,165,026
57.01%
6,912,053
42.99%
97
List on the Unlisted Securities
Exchange (USX): Subject to Resolution 1
being approved, that the Company list on
the Unlisted Securities Exchange and the
directors are authorised to undertake all
actions and enter into any agreements
and other documents necessary to give
effect to this Resolution.
55,851,877
89.18%
6,775,393
10.82%
7,923
Both resolutions passed.

NB.
15th July.Trading halt at close of business on NZX.
17th July.GFL delisted from NZX.
18t July GFL shares start trading on USX Unlisted Market.

[percy]

Been interesting watching GFL's trading the past few days before they delist and move to The Unlisted Market.
Some big volumes being traded.
Yet the buyers are not getting any.
Big seller has never put their shares on the market.
??????????????????????????????????
I guess a major broker is matching his sell client's orders with an undisclosed buyer.
I would expect better from NZX.
Most probably be more open on USX.