NZ firm forecasts return to profit in 2010

Despite reporting its second consecutive annual loss, Geneva Finance, one of New Zealand’s growing number of troubled finance companies, hopes to be back on track next year. In April last year, the company froze deposits worth NZ$138mn from more than 4,000 investors. Losses for the year to March 31 totalled NZ$7mn. However, the company said the second half of the year recorded a pre-tax profit of NZ$636,000. Geneva Finance’s management said this is a strong indication that it is on the right road to recovery and it forecast a return to full-year profit of NZ$1.5mn for the year ending March 2010. Geneva Finance’s profit recorded in the second half of the year was largely attributed to restructuring at the firm and the acquisition of the Quest Insurance group and Stellar Collections. Quest contributed NZ$1.3mn to operating profit. Geneva Finance has repaid NZ$55mn in principle and interest to shareholders under its capital reconstruction program.