Motor Trade Finance Limited Analysis

Overview

Motor Trade Finance Ltd (MTF) is a dealer owned finance company, providing vehicle finance to the customers of its dealer shareholders. Formed in 1970, it has grown from a cooperative to an investor owned company. MTF operates by franchising, it listed its first debt security on NZX since June 1994. In July 2006 MTF listed $40 million preference shares on NZX under the ticker of MTFHC on NZX. In February 2016 it changed name from Motor Trade Finances Limited to Motor Trade Finance Limited. The ticker code remained as MTF.

Performance

The following information was extracted from Motor Trade Finance Ltd's full year results, released 29 November 2024:

MTF has today released its 2024 Annual Report, demonstrating the strength of its unique business model in navigating a turbulent economic environment. The business delivered another record year that built on a very strong FY23. Mark Darrow, Chair of the Board, commented: "If 2023 showcased our potential in favourable conditions, 2024 demonstrated our resilience against headwinds. Despite economic challenges, the company along with our originators performed extremely well. This is a testament to the strength of our model, our strategy, the commitment of our team, and the enduring trust of our customers." Key Financial Highlights - Receivables Growth: Finance receivables grew by 10% to a record $1.1 billion, reflecting sustained demand for MTF’s lending solutions. - Originator Earnings: Total earnings distributed to originators increased by 7% from the previous year to a record $91.6 million, the highest return to date for our network. - Revenue Growth: Gross revenue of $175.1m is up 27% year on year, further supporting MTF’s growth trajectory. - Customer Growth: The company expanded its customer base by 12% from the previous year, from 63,500 to 71,000 customers. - Shareholder Returns: The combination of underlying profit and originator earnings surpassed $100m for the first time. Strategic Investments for Long-Term Success Chief Executive Officer Chris Lamers underscored MTF’s commitment to growth through innovation and customer-centricity. Says Lamers, "This year, we continued our business transformation journey, revamped our brand strategy based on in-depth market research, and strengthened our customer-first philosophy. Our local owner-operators provide unmatched personalised service, ensuring customers are seen as individuals, not just numbers."