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  1. #21
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    quote:Originally posted by pimpit

    If you are after good interest rates put your share of money that u want to put into fixed interest in to a reputed overseas bank. This way you get good interest on the money as you dont pay tax on interest.
    if you're a NZ tax resident you must pay tax on your worldwide income. Not declaring would be evasion. Are you referring to the attraction of cashflow timing?

  2. #22
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    Support for your view Enigma

    "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."


    ASB remarks just sour grapes, say finance companies

    08.09.05
    By Georgina Bond


    Finance companies have come out fighting after one of the country's largest fund managers warned their debentures were "seductive" and posed unnecessary risk to small investors.

    Yesterday, many labelled the comments by ASB Group Investments "sour grapes".

    Elders Finance and Hanover Group executive chairman Mark Hotchin said the comments "smacked of desperation" as fund managers were losing money and market share to finance companies.

    "And so they should be because the returns are better and they are safer."


    He was angry finance company debentures had been called "seductive".

    "It's seductive because it's real. You're the first cab off the rank so you get paid first."

    Finance companies committed to paying a certain rate of return, whereas investors did not have that commitment from fund managers.

    On Tuesday, ASB Group Investments head Rob de Luca said investors put their money with finance companies seduced by the phrase "first ranking secured deposits" but, in many cases, their money was anything but safe.

    After analysing the financial reports of its competitor finance companies - guardians of more than $8 billion of hard-earned cash - ASB said many were earning weighted average interest margins of between 15 to 40 per cent, but were paying investors well below that at between 9 to 10 per cent.

    De Luca said a lot of that money was lent out to highly geared property developers and those returns were not appropriate returns for that risk.

    Although finance companies have had a dream run in recent years on the back of a rising property market, De Luca expected returns on the property market and investment in general to be more subdued going forward. This meant investors were not getting the security they would expect. Many finance companies felt ASB was painting the industry with too broad a brush.

    St Laurence Group managing director Kevin Podmore agreed investors were not getting appropriate returns for their risk in some instances.

    "But not everyone is charging 40 per cent interest rates."

    He suggested an independent rating process was needed to help investors gauge the level or return against the risk.

    Western Bay Finance chairman Jim Smylie said banks created a great opportunity for finance companies 10 years ago when they "wouldn't help the average man in the street".

    "Now they've realised what they have missed out on and are fighting for market share and trying to get back into the market we're in."

    While it was valid to urge investors to be cautious about where they put their money, it was up to the market to decide whether the returns on their risk was appropriate.

    Smylie did not think there was cause for alarm about an industry meltdown if the property cycle took a turn for the worse.

    "I think there's going to be a correction and I think some finance companies will find it difficult but they will just be absorbed by bigger players like ourselves."

    North South Finance managing director Darryl Eastgate was surprised at ASB's criticism.

    "North South has an $8 million overdraft from ASB, so the bank's security ranks pari passu with our investors."

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

    Asked if the statement by its investment arm was as strong as the bank anticipated, ASB head of corporate affairs Linley Wood said the aim was to urge caution and to remind investors of the me
    \"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.
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  3. #23
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    Elders Finance reports profit jump

    08.09.05 6.40am


    Commercial finance company Elders Finance has reported a 61 per cent leap in its annual net profit to $35.4 million, compared with $22 million last year.

    Mark Hotchin, executive chairman of its parent company, Hanover Group, said the"stellar performance" reflected strong operating revenue growth and tight control of operating expenses.

    Operating revenue passed the $100 million mark for the first time at $109 million, up from $80.9 million last year.


    \"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.

  4. #24
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    We have strayed a little from the topic, which is [u]not</u> whether to place money on secured (or any other) debenture through a finance company, [u]but</u> whether or not to buy shares in SCF should it list !!

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    Skelessi then give us some reason why we should invest in this companies shares.I for one, unless you can convince me something has dramatically changed in last 4years, would not touch this with a barge pole. Please Give me some pertinent facts. The rating companies seem in my opinion have a very biased view of finance companies. Some they rate highly on my reading of their prospectouses would be some of the most dangerous to invest in and vice versa.

  6. #26
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    Enigmna, sorry I didn't get back to you earlier, but I have been out of town. To answer your question, I think the attributes of SCF as a potential investment are very sucinctly summed up by Chris Lee who is a pre-eminent and well researched sharebroker on the Kapiti Coast. I trust he will not mind me quoting him. He says:

    ďThe best of the finance companies in New Zealand, without much argument from any analysts or commentators, are UDC Finance and South Canterbury Finance.

    They share a genuinely long heritage, they have substantial capital, they lend at rates comparable with the trading banks, they are profitable, and they have knowledgeable management and directors.
    The best of the finance companies in New Zealand, without much argument from any analysts or commentators, are UDC Finance and South Canterbury Finance.

    They share a genuinely long heritage, they have substantial capital, they lend at rates comparable with the trading banks, they are profitable, and they have knowledgeable management and directors.
    SCF lends across all the sectors, its bad debt level is low, its margins fair, and thus from its billion dollar of assets, it produces a tax-paid profit of around $25 million, a 2.5% margin. By comparison, Provincial Finance last year produced the same sort of profit from a $250 million book, suggesting an effective tax-paid margin of 10.0%.

    SCF's best known figure is Allan Hubbard, a legend in the town, driving a very old, olive green VW Beetle, spurning toys like cell phones, reaching his office each day before dawn, and reading all the mail, the better to stay informed.

    He still signs every debenture certificate and there are 700 issued each week.

    But SCF also has competent staff, headed by CEO, Lachie McLeod, once a Super 12 referee and once Westpac's South Island head of rural lending, and it has other very experienced, down-to-earth directors and management.

    McLeod is a quiet, fit young man (40s, I guess) who heads a structure that has several wholly-owned companies in cities like Palmerston North, Dunedin, Auckland and Hamilton, each named by their geographic base.

    The company's funding manager is Kevin Gloag, probably the most experienced and respected funding manager in the industry, himself once a Highlanders rugby coach.

    South Canterbury Finance prides itself as having no frills, just a successful business, built on competent, normal people, confidently performing their duties knowing that if the company ever needed more capital, either Allan Hubbard would write a cheque, or any number of institutions would take up a share opportunity.

    As its owner is 77, there must be a fair chance that some of the company will be floated, perhaps this year.

    If that occurs, the queue for shares will stretch way past Ashburton and Oamaru, and I will be part of it. ď

    Chris Lee has done extensive research into the finance company sector and his weekly articles (not always complimentary) may be read on his website at &lt;www.chrislee.co.nz&gt; They are usually most informative and interesting.

  7. #27
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    Long Strangle,

    What do you think of South Canterbury Finance?
    \"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. #28
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    Skelessi Thanks for efforts so far.But have you read their prospetous not their investment statement. Who do they lend to is it a broad spectrum or a very narrow focus,and what are the percentage limits to any one sector. The last time I bothered to look at one of their prospectuses the very narrow focus they concentrated on (I am not saying they are not successful) for lending made it a very high risk company in my opinion if there was a down turn in that sector. Very like a certain finance company (with no connection to South Canturbury Finance just used as an example)that has a huge exposure to VTL and it's clients.

  9. #29
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    There is no prospectus yet. The discussion arose out of an article in the New Zealand Herald (see posting by rmbrave on 07/09/2005 for verbatim copy) suggesting that the company might list before the end of the year. I can only suggest that with it's position in the market and track record a float would be overwhelmingly successful. If you do not like finance companies (which appears evident from your comments) then, if it should list, stay away. I won't.

  10. #30
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    Skelessi I have money invested in five finance companies in their first ranking debentures and the odd capital note. To the tune of about $60000.00 Their prospectous for borrowings should be available by making a phone call asking about lending them money they usually have an add in NZ Herald. Tell them you want the prospectous not the investment statement which is what they send most people. But you have a full legal right to ask for the full prospectous. This might give you a better insight into the company. As I said about four years ago it made me run a mile. And it is not easy to obtain a current one from Australia.

  11. #31
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    I think Skelessi & Chris Lee are spot on.
    If SCF do float, the South Island will back them, as well as many in the industry. Not me, I prefer a bit more risk/reward at present.
    It won't be given away, and it won't be a dog.
    Just a boring conservative well run company.
    And yes, Allan Hubbard does make mistakes, Broadway & Scales have made a few.


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    clips: existing thread to read
    regards
    om mani peme hum

  13. #33
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    Finance float sails forward quietly

    03.11.05
    By Richard Inder


    Allan Hubbardís South Canterbury Finance is gearing up for a sharemarket float - a move that is likely to see the intensely private Timaru-based businessman pocket as much as $210 million.

    South Canterbury, which has a loan book of around $1.02 billion, making it the third-largest finance company after UDC and Marac, is silent about the listing likely to occur in the lead up to Christmas.

    However, in a short statement yesterday, it said Hubbard would sell up to 75 per cent of the company, which is worth as much as $280 million, according to an analysis of company earnings. Forsyth Barr would be the floatís lead manager.

    South Canterbury said: "Further details regarding the listing will be provided once the prospectus has been registered."

    The float is an apparent about-face for the company. Hubbard told the Business Herald last month: "They [the media] are always talking about floating South Canterbury Finance.."

    Hubbard, over 70 and chairman of the firm, is thought to be selling so he can ease back on his workload.

    The company faces a tough road to market.

    It will be vying for investorsĀEattention in competition with Graeme Hartís transtasman food business Goodman Fielder, which is seeking about A$1.6 billion before Christmas.

    It is floating at a time when higher interest rates and the high dollar are putting the brakes on the economy.

    Finance companies have also been criticised for poor disclosure and for their exposure to sectors prone to the downturn such as consumer lending and property.

    However, South Canterbury, established in 1926, is one of the stronger companies in the sector. It has a diversified loan book spread across a diverse range of sectors.

    Its earnings have shown steady growth. In the year to June, net profits rose from $20.7 million to $26.5 million and sales rose from $106.7 million to $131.6 million. In the year to June 2003, net profits of $15.8 million were made on $89.1 million of sales.

    One analyst said: "Itís been around a long time. I rate them highly."

    Hubbard said of the latest results: "Over the next 12 months, South Canterbury Finance looks forward to conservative growth through planned development and further diversification of its lending exposure across a broad range of industries."

    South Canterbury is the holding company for several finance subsidiaries across the country, including Auckland Finance, Waikato Finance and Palmerston North Finance in the North Island and the Southland and Otago Finance in the South.

    It also trades on Hubbardís reputation for parsimony and conservatism.

    Although Hubbard is one of the South Islandís wealthiest men, he lives a humble life, working from 6.30 in the morning until 10.30 at night and still drives a 37-year-old VW Beetle.

    - additional reporting Andrea Fox


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

  14. #34
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    quote:Originally posted by Gofish.

    I think Skelessi & Chris Lee are spot on.
    If SCF do float, the South Island will back them, as well as many in the industry. Not me, I prefer a bit more risk/reward at present.
    It won't be given away, and it won't be a dog.
    Just a boring conservative well run company.
    And yes, Allan Hubbard does make mistakes, Broadway & Scales have made a few.

    Whilst I agree SCF will be a fairly safe bet but not cheap entry to the sector I wouldn't make my decision based on Mr Lee's errudite comments. Had a look at his site "geez is all I can say

  15. #35
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    quote:Originally posted by lambton

    Whilst I agree SCF will be a fairly safe bet but not cheap entry to the sector I wouldn't make my decision based on Mr Lee's errudite comments. Had a look at his site "geez is all I can say
    I had a look at his site too. No nonsense like his comments. Some minor navigation / usability issues but nothing as frustrating as those many expensive web developments that only work for those using Internet Explorer.

    On South Canterbury Finance: The company is a much higher quality lender than many of its so called peers. If Mr Hubbard wants to sell at the top of the market so be it - I suspect the mooted transaction will have more to do with tidy estate planning than extracting the last dollar.

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    I imagine Alan Hubbard also had to find some money somewhere to pay out Humphrey Rolleston.
    Maybe buy a new VW with the change?

  17. #37
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    I have some sympathy for all the points of view expressed.
    Why can't I escape the sneaking unworthy suspicion that de Luca, as a Funds Manager, would like to rain on all finance company parades to try and drive more investment into the dreadful managed funds area which achieves a rotten rate of return below the market indices and hits investors with fees left right and centre.....
    I read recently that the funds industry is continuing to lose funds massively, some sort of cash outflow of about $800 mill in the last year as investors wise up on how bad they are. Probably another reason for TEL going down (as well as the overseas investors taking their exchange profits), the funds industry has to sell TEL at any price to pay out withdrawers.
    Yes, Dominion Finance comes to mind as the most recent and successful float.
    On the other hand Warren Buffett enjoins us to avoid floats as its a means of milking suckers as Capitalist notes. But there are the occasional exceptions Cap Props, TEL, CEN....
    But who is the organising broker? Unless you have an a/c there you can kiss goodbye to the prospect of getting a meaningful parcel.
    It all depends whether Hubbard leaves some profit in for the punters or does another Mike Pero....

  18. #38
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    quote:Originally posted by Skelessi

    Enigmna, sorry I didn't get back to you earlier, but I have been out of town. To answer your question, I think the attributes of SCF as a potential investment are very sucinctly summed up by Chris Lee who is a pre-eminent and well researched sharebroker on the Kapiti Coast. I trust he will not mind me quoting him. He says:

    ďThe best of the finance companies in New Zealand, without much argument from any analysts or commentators, are UDC Finance and South Canterbury Finance.

    They share a genuinely long heritage, they have substantial capital, they lend at rates comparable with the trading banks, they are profitable, and they have knowledgeable management and directors.
    The best of the finance companies in New Zealand, without much argument from any analysts or commentators, are UDC Finance and South Canterbury Finance.

    They share a genuinely long heritage, they have substantial capital, they lend at rates comparable with the trading banks, they are profitable, and they have knowledgeable management and directors.
    SCF lends across all the sectors, its bad debt level is low, its margins fair, and thus from its billion dollar of assets, it produces a tax-paid profit of around $25 million, a 2.5% margin. By comparison, Provincial Finance last year produced the same sort of profit from a $250 million book, suggesting an effective tax-paid margin of 10.0%.

    SCF's best known figure is Allan Hubbard, a legend in the town, driving a very old, olive green VW Beetle, spurning toys like cell phones, reaching his office each day before dawn, and reading all the mail, the better to stay informed.

    He still signs every debenture certificate and there are 700 issued each week.

    But SCF also has competent staff, headed by CEO, Lachie McLeod, once a Super 12 referee and once Westpac's South Island head of rural lending, and it has other very experienced, down-to-earth directors and management.

    McLeod is a quiet, fit young man (40s, I guess) who heads a structure that has several wholly-owned companies in cities like Palmerston North, Dunedin, Auckland and Hamilton, each named by their geographic base.

    The company's funding manager is Kevin Gloag, probably the most experienced and respected funding manager in the industry, himself once a Highlanders rugby coach.

    South Canterbury Finance prides itself as having no frills, just a successful business, built on competent, normal people, confidently performing their duties knowing that if the company ever needed more capital, either Allan Hubbard would write a cheque, or any number of institutions would take up a share opportunity.

    As its owner is 77, there must be a fair chance that some of the company will be floated, perhaps this year.

    If that occurs, the queue for shares will stretch way past Ashburton and Oamaru, and I will be part of it. ď

    Chris Lee has done extensive research into the finance company sector and his weekly articles (not always complimentary) may be read on his website at &lt;www.chrislee.co.nz&gt; They are usually most informative and interesting.
    Chris Lee? Didn't he recommend against Sky TV and OMIP in a newsletter but recommended Kiwi Income Development Trust and AMP Office Trust in same newsletter? Sky TV and OMIP are both well up (several hundred %) but Kiwi and AMP investors lost money.

    South Canterbury Finance to be done by Forsyth Barr - remember Feltex?

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    So [u]much</u> conjecture and so [u]little</u> information!! The only certain thing is that the rumour mill [u]was</u> right. I do not think SCF will be floated badly. In my estimation, the current owner of the company is too astute for that and will want to see the company continue to grow and prosper. I will await the prospectus with interest and make up my mind from that.

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    South Canterbury Finance to list

    02.11.05 3.50pm
    Privately held South Canterbury Finance, one of the country's biggest finance companies, today confirmed it is gearing up for a sharemarket listing.

    The 80-year-old firm is controlled by Timaru businessman Allan Hubbard.

    Mr Hubbard, 77, last year bought out his long term partner, Humphry Rolleston. Now he plans to sell up to 75 per cent of his holding - which is held under the name Southbury Group Ltd.

    Forsyth Barr has been appointed as lead manager, while Timaru-based financial services minnow Munro Hubbard Ltd will co-manage the float.

    Today's news confirms a two-month rumour.

    No further details were released, but sources close to the deal have previously said the float was likely to value the company at $200 million, making it one of the richest sharemarket offerings in the second half.

    The low-profile Mr Hubbard 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.

    South Canterbury Finance last month posted a record after tax profit of $26.5 million for the year to June.

    Profits before tax rose $5.8 million to a record $30.2 million, up nearly 24 per cent on the previous year.

    Total assets topped $1 billion for the first time in its 80-year history, making it the country's second biggest consumer finance company after bank-owned UDC.

    - NZPA

    \"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.

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