Perth-based property finance group Homeloans has announced a 10 per cent jump in normalised net profit after tax to $9.2 million.
Perth-based property finance group Homeloans has announced a 10 per cent jump in normalised net profit after tax to $9.2 million.
The profit came despite the company's revenue falling 23 per cent to $7.7 million during the 2010 financial year.
Homeloans declared a fully franked final dividend of 3.5 cents per share.
It has also reiterated plans for a capital return to shareholders of 35 cents per share in September.
Homeloans executive chairman Tim Holmes said this was another very pleasing result.
He said the Group had emerged from the challenges of recent years in a strong position and continued to deliver record earnings results.
See company statement below:
Homeloans Limited (ASX:HOM) has today announced a record statutory Net Profit
After Tax of $12.3m for the year ended 30 June 2010, up 71% on the previous financial year result of $7.2m. On a normalised basis excluding non cash adjustments, Net Profit After Tax was $9.2m, up 10% on the comparable previous financial year result of $8.3m.
In achieving this strong result, the Board has:
- Repaid all the Company's outstanding recourse debt amounting to $11m.
- Declared a fully franked final dividend of 3.5 cents per share bringing the total
dividend to 7 cents per share for the year fully franked.
- As previously advised intends subject to shareholder approval to return 35
cents per share to shareholders as a return of capital.
An increase in lending volumes, supported by an improved mortgage market, resulted in a 36% increase in net fee and commission income to $14.6m. Despite the growth in lending volumes, operating expenses (excluding loan loss provisioning) remained stable at $17.3m, the result of continued improvements in operating efficiencies across the business. Net interest income was down 20% to $15.7m due to reduced balances in the Company's securitised loan portfolio.
Basic earnings per share increased significantly by 70% to 12.21 cents. Net tangible asset backing per share increased 5% to 56.1 cents compared to 30 June 2009.
Homeloans Executive Chairman Tim Holmes said this was another very pleasing result. The Group has emerged from the challenges of recent years in a strong position and has continued to deliver record earnings results.
Mr Holmes said recovering housing and credit markets have presented growth opportunities which the Company has been well placed to take advantage of.
"The availability of funding improved throughout the year which, together with
improving economic conditions and renewed confidence from borrowers, resulted in
continued growth in the mortgage lending market. In particular, the improved
availability of funding supported the resurgence of home loan providers outside the
major banks," Mr Holmes said.
"The Group has continued to provide a superior service level proposition and was able to support this with an improved product offering during the period. This was a key driver of our ability to generate increased origination activity during the period.
We have also developed more effective distribution channels and continued to benefit from a diversified wholesale lending base. The Company is well placed to continue this momentum over the next 12 months".
Mr Holmes made note of the capital return of 35 cents per share announced by the Company towards the end of July and to be paid in September, subject to shareholder approval. "The capital return was a logical step for the Board to take to ensure an efficient capital structure," Mr Holmes said.
Mr Holmes said the Company will retain a solid capital base after the capital return, with residual cash reserves being supplemented by strong operating cashflows emanating from continued earnings. "The Board believes the ongoing cash reserves will be sufficient to meet the Company's ongoing funding requirements including future business development and investment," Mr Holmes said.
