Esanda well ahead for six months

Press, Issue 33842, 14 May 1975, Page 23

Esanda well ahead for six months

(N.Z.P.A.-Reuter—Copyright)

MELBOURNE.

The net profit of Esanda, Ltd, the wholly-owned finance subsidiary of the A.N.Z. Banking Group, Ltd, rose 48.7 per cent to $5,568,000 in the half-year to March 31, the directors report.

The profit increase was after adjusting the result for the half-year to March 31, 1974 by $165,000 to $3,744,000 to reflect comparable company tax rates. Tax provided increased from $2,969,000 to $4,729,000. The profit was struck after adding a further $500,000 to the doubtful debt and contingencies provisions. All known and expected losses were written off in the six months. Actual losses less recoveries amounted to $383,000 compared with $209,000 last year. The quality of the company’s business was not expected to deteriorate, despite uncertain economic conditions.

An over provision of tax of $426,000, relating to the year to September 30, 1974, is not included in the result, the directors said. The increase in profit was after the record growth of 49 per cent in receivables achieved in the year to September 30.

The flow-on Of earnings stemming from this substantially higher base of receivables had contributed

materially in meeting steep rises in cost of funds and other operating expenses. Control of costs, and improvement in operation procedures were also factors in the result.

The progressive replacement of low-rate business at current market rates assisted in partially restoring margins between. costs and earnings on funds to level in previous years.

Net receivables rose s32m to $545m during the six months. Most receivables were from hire purchase, leasing, and instalment loans. Amounts receivable in the next twelve months totalled s3som, and amounts payable amounted to $233m.

Income yet to mature at March 31, 1975 totalled sl2lm. Since January there had been a marked slackening in demand for most types of finance provided by the company. and growth in outstandings in the balance of the year is not expected to be large, but a satisfactory profit is forecast for the full year.