Originally Posted by
Roger
My turn to respectfully disagree. What I've witnessed over my 30+ year career as an accountant is that start-up's are incredibly risky. Take restaurants for instance. At one point BNZ had anecdotal evidence that there was an 80% failure rate within two years on a new restaurant opening its doors. Plant and equipment can often only be liquidated for 10-20 cents on the dollar...you do the maths. An old bank manager once told me at a function after he'd had enough lubricant to be honest, that he's never seen a cash flow forecast for a new start-up that was worth the paper it was printed on...and I tend to agree.
Likewise I have reservations about Harmoney...all of their loan processes are computerised, how rigorous are front end credit checking procedures, their operating and debt recovery systems and procedures ?, what sort of level of delinquencies will materialise over time ? (Notice that bad and doubtful debt provisioning is already up in the half year report just released ?) Naturally it makes for happy reading to have all this new lending business being generated but what net effect over time as delinquencies rise ? Finally what has Ora HQ got to do with the core business of HNZ ? Perhaps they need to explain themselves better.
Plenty of questions for the next ASM. I hold but am cautious. I guess I must be an old fashioned bloke that believes loans should be really thoroughly vetted in an old fashioned way. I like business's, (and Kiwi cricketers, GO THE BLACK CAPS) !!!!!! that have plenty of runs on the board to prove their credibility. The most I'd lend a start-up is the worth of a cricket bat and gloves and tell them to go prove yourself :)