Weak investor confidence frustrates companies

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Instant Finance, which specialises in personal finance lending, has doubled its profit, achieving a net surplus after tax of $2.45 million for the six months ended September 30.

Friday, December 21st 2007, 7:20AM

Chief executive Richard de Lautour says he is pleased with the result as it is well above the $1.2 million achieved in the corresponding period last year.

He also says that "profitability has been restored in line with historical levels".

He says the company's wholesale funding resources and confidence in the ongoing level of investor support had contributed to the result. Added to that Instant Finance recorded "a marked decrease in impaired asset expenses."

"Unfortunately further industry failures over recent months have had an adverse impact on investor confidence and as a result Instant Finance intends to conservatively manage its lending activities in the second half of the year. While this policy will have some impact on profit, the full year profit performance is expected to be significantly up on the March 2007 result," de Lautour says.

De Lautour says Instant Finance is well placed as a finance company as its loan portfolio generates significant weekly inwards cash flows as all the loans are for relatively short terms and on a full principal and interest repayment basis.

"Over the next 12 months forecast cash inflows are $59.4 million while outflows are $45.6 million."

"Whilst all key internal performance indicators are positive it is particularly frustrating that a lack of investor confidence in the finance sector prevents the company from taking advantage of the considerable organic and acquisition growth opportunities presently available."

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