Investor Newsletter #2 - June 2007

Welcome to our tenth General Finance quarterly investor newsletter.  We appreciate your support.  The purpose of this newsletter is to keep you informed about the company and various financial matters that may interest you. 

Our Result to 31 March 2007

• General Finance Limited has in the past few days, released its audited financial result to 31 March 2007. The company had a successful year and the following highlights were noted
• Net surplus before tax was $702,909, up 48% from $473,555 the previous year. 
  
• Total Assets increased to $10.12 million, up 21% from $8.34 million the previous year. 
• Paid up capital increased to $2.00 million from $1.00 million.
  Equity increased to $2.85 million, up 52% from $1.88 million the previous year.
  
• The Company did not declare any Bad Debts during the year.  It did increase its general provision for Doubtful Debts to $80,817 which is 1% of mortgage advances.  We consider this prudent.

The Housing Market May Be Slowing

Last week the Real Estate Institute reported a new record national median residential house price of $350,000 for May.  But they noted that the increase was only $1,000 from April and that the surge in prices appeared to be slowing.  The Auckland median fell from $452,000 in April to $450,000 in May. The Wellington region however showed strong growth for the month, up from $377,000 to $385,000 in May.  There were 9,285 houses sold in May 2007 compared with 9,642 in May 2006.  Days to sell rose from 28 in April to 30 in May, indicative of a slowing market.  With the recent increase in the Official Cash Rate to 8.00%, further slowing is expected. 

An Example of Our Lending

One of our existing first mortgage customers had signed a sale and purchase agreement to buy the property next door to his home, but had gone unconditional without allowing enough time for funds to be sent from the UK to pay the deposit.  
We provided, at short notice, a General Finance second mortgage against our existing security to allow the deposit to be paid.  This secured the customer the property ahead of a number of back-up offers.
The second mortgage will repay when the funds come from the UK.  We will also do the first mortgage for the purchase in due course.

General Finance Prospectus Number Four

Our new prospectus is being printed and will be ready later this month.

Next Interest Payment Date

Our next quarterly interest payment will be made on Friday evening, 29 June 2007.  Direct credits will go in that evening, with cheques (if applicable) and paperwork being forwarded the following week.  Our cut off date for this payment is 15 June. Those investors who made new or additional deposits between 15 and 29 June, will have interest on those deposits accrued and paid out at the end of the following quarter.

If you have any questions about your investment please do not hesitate to contact me on 09 526 7800. 

If you want to invest more funds or obtain statements and the like, our securities registrar’s number is 0800 500 602. 

Your continued support is much appreciated.