Quote:
Monday, 22 March 2010
Throughout this period, South Canterbury Finance has
continued to provide attractive returns for investors and
without fail has always repaid funds when due on maturity. In
return, the Company has been rewarded with the confidence
of you and 40,000 others who have remained steadfast
supporters. Your loyalty is humbling and has contributed to
the success of the Company over its 84 years history.
I want to assure you that the Company is soundly based and
well positioned to meet the challenges ahead. Recently,
Southbury Corporation, which is indirectly controlled by me
and my wife Jean, announced it had injected new equity
into South Canterbury Finance totalling $152.5 million. This
followed several other measures in recent months including
the appointment of new independent directors, and new
senior management with the skills to meet the demands of
the changed environment.
The capital injection was achieved when Southbury
Corporation sold its 100 per cent shareholding in Helicopters
(NZ) Limited and 64 per cent of the shares of Scales
Corporation Limited to South Canterbury Finance.
Helicopters (NZ) and Scales Corporation are substantial and
profitable companies with which I have had a long and
personal association. In the year ended 30 June 2009 the
combined results for Helicopters (NZ) and Scales Corporation
returned a net profit after tax of $29.8 million. The earnings
contributions of these two successful companies are now
part of South Canterbury Finance and substantially change
the earnings profile for the benefit of all stakeholders.
As might be expected, the Government and the Reserve
Bank of New Zealand are introducing new regulatory
requirements for the finance sector. In addition, an Extended
Retail Deposit Guarantee scheme has been introduced
to replace the existing Retail Deposit Guarantee scheme
which expires on 12 October 2010. The Company meets the
eligibility criteria for participation in the Extended Retail
Deposit Guarantee scheme and believes that it has taken
all the steps necessary to be accepted into the scheme. If it
is accepted, investors will have the benefit of the Extended
Guarantee from 12 October 2010 through to 31 December
2011, when the scheme expires.
A decision from Treasury on our application for participation
in the Extended Retail Deposit Guarantee scheme is expected
shortly. Regardless, all eligible existing, and new, depositors
and investors continue to have the benefit of the current
Retail Deposit Guarantee scheme through to 12 October 2010.
In a further development, Sandy Maier was appointed Chief
Executive Officer in late December 2009 and together with his
new senior management team has made significant progress
with the restructuring of the Group’s financial affairs and
overseeing of the Company’s loan book. Sandy brings to the
Company 35 years experience in corporate restructuring and
has quickly forged a strong working relationship with the
Board and company staff.
I acknowledge that the recent financial performance of the
Company has been disappointing and this has adversely
affected investor confidence but I remain totally committed
to ensuring a successful future for South Canterbury Finance.
I am satisfied that we are well on the way to a totally
fresh approach to the future and the restoration of South
Canterbury Finance as a leader in the sector. This may require
the raising of further capital by the Company and possible
sale of non-core assets to ensure compliance with the new
regulatory environment.
Once again, thank you for your ongoing support. We will
continue to keep you informed on our progress as new
information becomes available.
Yours Sincerely
Allan Hubbard
Chairman