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  1. #1
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    Default South Canterbury Finance Limited

    An interesting short article appears in the New Zealand Herald on 2nd September 2005 recording the rumour that up to half of SCF may be floated shortly. The NBR says it is "well in the pipeline" although Chairman Hubbard is not prepared to confirm the rumour. From the current financials and ratings it would probably be a roaring success and this investor would be a keen starter. Any comments?

    Skelessi.

  2. #2
    Reincarnated Panthera Snow Leopard's Avatar
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    if the rumour becomes fact, then I will look at it
    om mani peme hum

  3. #3
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    The rumour has been out there for a while. I'd definitely be interested.

  4. #4
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    The last finance company that listed was NZF and we all know what happened then don't we?
    \"The overweening conceit which the greater part of men have of their own abilities [and] their absurd presumption in their own good fortune.\" - <b>Adam Smith</b> - <i>The Wealth of Nations</i>

    The information you have is not the information you want.
    The information you want is not the information you need.
    The information you need is not the information you can obtain.
    The informaton you can obtain costs more than you want to pay.

  5. #5
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    Timaru businessman tipped to float finance company

    02.09.05 1.00pm


    Timaru businessman Allan Hubbard is rumoured to be readying his privately-held finance company for a sharemarket listing later this year.

    The possible float would likely value the 80-year-old South Canterbury Finance (SCF) company at $200 million, making it one of the richest sharemarket offerings of the second half.

    Mr Hubbard, 77, bought out his long term partner in the firm, Humphry Rolleston, in August last year. He is now reportedly planning to sell half of the finance company in a sharemarket float.

    The National Business Review today quoted sources close to the deal as saying a partial sale was "well in the pipeline", adding that Mr Hubbard had recruited a small Timaru-based financial services firm to advise on the float.

    Mr Hubbard played down the rumours, saying he had not made any decisions and would be in breach of the Securities Act if he said he was floating when he was not.

    The low-profile Timaru businessman is one of the South Island's wealthiest men, with an estimated worth of $400 million. He has investments across a range of industries, but lives a humble existence, still driving about in an ancient VW Beetle.

    SCF is due to issue its annual result for the year to June in the next few days. Last year the firm reported a full-year net after tax profit of $19.8 million.

    In the 2004 year it had a loan book of more than $825m and operating income of $64.78m, making it the country's second biggest consumer finance company after bank-owned UDC.

    \"The overweening conceit which the greater part of men have of their own abilities [and] their absurd presumption in their own good fortune.\" - <b>Adam Smith</b> - <i>The Wealth of Nations</i>

    The information you have is not the information you want.
    The information you want is not the information you need.
    The information you need is not the information you can obtain.
    The informaton you can obtain costs more than you want to pay.

  6. #6
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    With the state of finance coys at the moment - yes- it is a great time to off-load it onto the sheeple

    Someone's smart.

  7. #7
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    ASB Group Investments head Rob de Luca is not a fan of finance companies either.


    ASB gives warning to small investors

    07.09.05
    By Georgina Bond


    One of the country's largest fund managers has hit out at finance company deposits, saying they pose an unnecessary risk for small investors.

    ASB Group Investments head Rob de Luca said New Zealanders had invested more than $8 billion with finance companies at rates of up to 10 per cent - believing their money was secured and their returns were safe.

    "The reality is that neither of these things [is] true. Investors put their money with finance companies, seduced by the phrase 'first ranking secured deposits', but in many cases their money is anything but safe."

    He said the money was frequently lent on to highly geared property developers or as high-risk personal loans to people unable to borrow from traditional sources.

    Investors were not getting the appropriate compensation for the risk.

    ASB Group Investments is New Zealand's third-largest fund manager, with more than $5.3 billion under management.

    Although in competition with finance companies, "the reality is if one of these guys falls over it's bad for the whole investment sector, not just for them", a company spokesman said.

    "We're more concerned that investors do the right thing and no one gets burned."

    ASB's analysis of finance company reports showed many were earning weighted average interest margins of between 15 per cent and 40 per cent from their investments, but were paying investors' much lower rates, at between 9 per cent and 10 per cent in return.

    "The ironic thing is if someone offered investors a return of 40 per cent they would automatically think the risks were too great.

    "But investors aren't necessarily getting the return for that risk or maybe aren't aware of the risk they're actually taking," said De Luca.

    Finance companies have had a dream run during the past few years on the back of a rising property market and periods of robust economic growth.

    But concern has been mounting about what will happen if the economy and the property market hit the skids.

    Yesterday, De Luca was urging caution:

    "We've gone through a reasonably strong cycle in the investment space and property space, and we expect that to be a bit more subdued going forward ... we expect to see some issues," he said.

    "We're saying to investors - be careful, speak to credit advisers when you look at an investment and really understand what you're investing in. Don't be fooled by the topline rate."

    Finance companies came under the spotlight last September when the Securities Commission warned many were not keeping investors informed about the risks they faced - with some not meeting the minimum legal requirements.

    That was based on an analysis of 30 companies' disclosure statements and was a precursor to a full report on the state of the industry.

    The commission's report, released in April, said finance companies should improve their disclosure to investors.

    Areas singled out for attention and improvement included: risk disclosure, principal risks, company activities, related party lending and the use of rating information and other disclosure issues.

    A follow-up review of finance companies' disclosure statements this year will focus on documentation, with the commission looking to see if companies have improved their practices.
    \"The overweening conceit which the greater part of men have of their own abilities [and] their absurd presumption in their own good fortune.\" - <b>Adam Smith</b> - <i>The Wealth of Nations</i>

    The information you have is not the information you want.
    The information you want is not the information you need.
    The information you need is not the information you can obtain.
    The informaton you can obtain costs more than you want to pay.

  8. #8
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    South Canterbury Finance would have to be one of the better finance companies around in terms of security and rates offered to debenture holders. As far as their profitability goes, I'm not sure but if its year has been on a par with Marac's then it should be pretty good. As with anything, though, it all depends on the price they want for it. My guess is that they would have to price it at a PE of 12 to 14 or under to make it an attrctive offer.

  9. #9
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    SCF has a AAA rating for investors in secured debenture stock and is considered to be in the top three or four safest finance companies in New Zealand. The topic here is [u]not</u> about the lending side of the company, but whether it would be a good company in which to have an [u]equity share</u>.

    Certainly there are a few 'dodgy' companies which may yet 'fall over' but this is unlikely to be one of them. I think it is a little unfair to 'tar' all finance companies with the same general 'brush' of being risky in the manner rmbrave, Capitalistand a few others are willing to do. The gearing of SCF is in much better shape than most finance companies and it has a track record from 1915 of being run as a conservative 'money machine'.

    I would certainly put it on the same footing as Marac (which is also in the top three or four in ratings) and that company is one of the prime reasons PGC (the holding company)is a popular share. I think Snapperhas the right handle on things.

    If it does float, I would consider it to be fortunate that investors would have a chance to participate in a company in the finance field which historically has a proven solid background. After all, there are very few companies left in the NZX which remain "New Zealand owned and operated". Look at the banks - most are Australian and although very good investment prospects, leave a lot to be desired when it comes to the aspect of taxation of dividends.

    It would be healthy for the NZX to have another share market opportunity such as SCF.

  10. #10
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    quote: rmbbrave posted:
    The last finance company that listed was NZF and we all know what happened then don't we?
    What about Dominion Finance, recently listed? I don't hold it but it strikes me as a quiet and solid achiever. Currently 124cps and paying 10+c div. Comparable in quality with SCF imo.

  11. #11
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    Who do you work for? Goodness gracious me. Ask anyone in the Banker's Assoc about finance coys. The fact that ASB has gone public means it is a LOT worse than it looks, and it has been building up for years.

    Push your barrow somewhere else dude [}].

    PS Not you Lawso.

  12. #12
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    I don't work - for anyone. I simply invest - very sucessfully so far!!

  13. #13
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    OK...I mentioned this issue on the FBU thread a month or so ago and was abused so am a bit sensitive about it [:I]

    But it has been made public at last.

  14. #14
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    Capitalist and others banks and fund managers have a vested interest in keeping you out of finance company debentures. They want you to invest in managed funds thet gross you less than 2% and if they did not have competition from finance companies what would the banks offer you in interest maybe 0.2% to make their managed funds look good. And they would probally increase mortgage and loan rates by at least 2% due to lack of anywhere else to obtain loan money.

  15. #15
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    Indicators don't look so great for the NBFIs. They need capital to ride out a downturn - and many are too highly geared to do this.
    Even though SCF may have the size a general downturn in the FinServ sector will cause capital flight to something else.
    Wait for the crash, buy when the survivors are recovering.

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