It is the parent company of non-bank lender General Finance
The COVID-19 crisis has impacted various businesses in New Zealand since the beginning of the year. General Capital, the parent company of non-bank lender General Finance, was no exception.
General Capital reported that its profits fell below expectations in the year ended March 2020 despite a 254% increase in net profit for its lending subsidiary.
Its assets rose to $51.2 million in the year ended March 2020, with a pre-tax profit of $128,000 – up from a loss of $458,000 in the year ended March 2019. Its revenue also increased by 48% to $2 million.
However, the growth in its finance receivables book and term deposit liabilities was “not as fast as was originally anticipated” last year.
“While the balance sheet growth has been significant in the year ended 31 March 2020, due to delayed growth, the loan receivable book is $15.8m behind forecast as at 31 March 2020 and the term deposit liabilities are $5.9m behind forecast as at 31 March 2020,” General Capital said, as reported by Good Returns.
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General Capital's net interest margin was $1.1 million lower than their forecast, thanks to the “slower than anticipated growth and a high proportion of cash and cash equivalents in the balance sheets.”
“This, combined with less revenue than forecast from General Capital's research and advisory division, resulted in net profit after tax of approximately $1.2m behind the forecast,” the report said.
General Capital offered assurances that General Finance still experienced a “very positive year,” with a 102% year-on-year growth in loan receivables and 178% in term deposit liability.
