Dorchester more than doubles 1H earnings, raises annual profit guidance
Dorchester Pacific, the finance and insurance firm buying Turners Group, more than doubled first-half earnings with the contribution from recent acquisitions and lifted full-year guidance.
Net profit rose to $5.1 million, or 1.025 cents per share, in the six months ended Sept. 30, from $1.8 million, or 0.586 cents, a year earlier, the Auckland-based firm said in a statement. Revenue climbed 38 percent to $21.7 million, with its Oxford Finance acquisition performing 20 percent ahead of forecast.
"The group trading result for the first six months was just ahead of forecast," chief executive Paul Byrnes said. "All four operating businesses - Dorchester Finance, Oxford Finance, DPL Insurance and EC Credit - contributed positively, with Oxford Finance performing particularly well, 20 percent ahead of the acquisition forecast."
The financial services firm also raised its annual earnings guidance with auction firm Turners Group NZ set to join Dorchester's stable of units after it crossed the 90 percent threshold to mop up the remaining shares last month.
Dorchester expects pretax profit of about $14 million in the year ending March 31, 2015, compared to a previous forecast of $11.5 million, which was an upgrade from earlier guidance. The firm also anticipates abnormal profits of between $3.5 million and $4 million as a result of bringing Dorchester's 19.9 percent stake in Turners up to the market value of its full takeover.
Shares of Dorchester fell 1.8 percent to 28 cents, and have gained 30 percent this year.
The board declared an interim dividend of 4 cents per share, with a Dec. 12 record date, payable on Dec. 18.
Dorchester's finance business more than doubled earnings to $3 million in the half, on a 169 percent boost in revenue to $8.53 million, while the insurance unit reported flat earnings of $499,000 on a 30 percent gain in revenue to $3.01 million. The collection services business showed a 2.2 percent fall in revenue to $8.94 million, and a 12 percent decline in earnings to $2.07 million.
The firm generated an operational cash inflow of $1.59 million in the half, compared to an outflow of $4.28 million in the same period a year earlier. It had cash and equivalents of $8.65 million as at Sept. 30.
Dorchester has also offered to buyback small shareholders' parcels of less than 4,000 shares at 25 cents apiece. Shareholders won't have to pay brokerage, and will still qualify for the interim dividend.