Investor Newsletter #2 - June 2008

Welcome to our June 2008 General Finance quarterly 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. This newsletter, like our last one, will be more technical and we will be discussing various factors that make us able to handle the current economic issues facing the finance company sector.

Our Result to 31 March 2008

General Finance Limited has in the past few days released its financial result and its unaudited accounts to 31 March 2008. The company made a net profit before tax of $179,578, down from $693,059 on the previous year. Due to the changing and difficult market conditions, which have been unkind to finance companies, we have made a provision for doubtful debts of $570,625 up from $17,628 the previous year. We believe that this is prudent. Over the past year our Balance Sheet has strengthened - our cash position was $1,804,823 compared with $824,034 with the previous year. Our overdraft has been repaid in full. We have sold our premises at Level 1, 321Great South Road, at more than the original cost price but slightly down on the revalued amount.

Our investors can feel confident that we have taken into account the more difficult market conditions and we have strengthened our balance sheet. At year end our liquidity (cash position) remained strong representing 25.04% of our total assets. Our shareholders funds were robust representing, 40.20% of our total assets.

A copy of our year end result will be posted on our website shortly or our investors can call us for a copy of our latest accounts.

Liquidity Management

One of the key management issues, particularly in the current economic climate and for finance companies in general, is liquidity management. This, in simple terms, is managing your cash, so you have sufficient liquidity to meet all current debenture redemptions, interest payments, new mortgage advances and to be able to cover any losses that may incur in realising any of your securities.  At General Finance Limited we take our liquidity management seriously. A year ago our normal cash balances were around 7-10% of our total assets but given the current economic circumstances we have increased this in the range of 20-35%. As at 20 June 2008 our cash balances are $2,437,668 which represents 36% of our total assets at that date. This figure will change as the economic environment changes but our investors can be assured that we are taking a conservative stance on our liquidity management.

Next Interest Payment

Our next quarterly interest payment will be made on Monday evening 30 June 2008. Direct credits will go in that evening, with cheques (if applicable) and paperwork being forwarded during the week.

If you have any questions about your investment please do not hesitate to contact me on 09 526 7801 or by email to wcairns@general.co.nz  Our website is a www.general.co.nz

If you want to invest more funds, to obtain an investment statement and an application form our securities registrar's number is 0800 500 602.

Your continued support is appreciated.