Investor Newsletter - June 2011

Welcome to our June 2011 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.

Good Result for the Year Ended 31 March 2011

General Finance Limited has recently released its financial result and its unaudited accounts to 31 March 2011. The company made a net profit before tax of $189,488, up from $100,159 on the previous year. Total assets have increased to $6.36 million from $5.46 million.  We are still maintaining high liquidity levels, with cash balances of $1.47 million, equating to 23% of total assets. This is positive news. We are again starting to see new investors depositing with us and current ones rolling over and continuing their association. Finance companies are now subject to stricter prudential governance by the Reserve Bank (as noted in our last quarterly newsletter). Our investment rates continue to be attractive.  General Finance Limited is looking forward to increasing its levels of business in the future.

A copy of our 31 March 2011 results will be posted on our website shortly and investors can call us for a copy.

Enhanced Corporate Governance
The owners of General Finance Limited believe in sound corporate governance.  As the company has grown we have sought to strengthen the board, and separate management from governance. 

On 15 April 2011 we appointed two independent directors.  Our new independent chairman is Mr Peter Anderson, is a retired chartered accountant and comes to us with long career with the Bank of New Zealand and more recently with Pioneer Mortgages Services. Our other independent director is Mr Jon Olsen who has many years experience in business including the property area. Full details of their background and experience are available on our website at http://www.general.co.nz/directors.htm.  We welcome our new directors and the considerable experience they bring to the board.

This governance enhancement is consistent with Reserve Bank of New Zealand prudential requirements for non-bank deposit takers.  Investors can feel a lot more confident that the overall supervision of the sector has been improved.  

Our Current Lending
Over the past six months we have been advancing some of our funds for business purposes. A company may have been looking for funds to expand or merely to repay more expensive debt such as hire purchase and chattel loans.  On all these loans, our lending criteria is the same - we only accept residential mortgage security and if the borrower is a company or a trust, we take personal guarantees as well.

Interest rates
Our interest rates have been fairly constant for the past few months. Just to remind our investors, if you are looking at a rate above 8.00%, our two year rate is 8.50% and our three year rate is 9.00%. If you deposit more than $10,000 with us, you can have your interest paid monthly. This is a great advantage for those wanting a regular monthly income.

Next Interest Payment
Our next quarterly interest payment will be made on the evening of Thursday 30 June 2011. Direct credits will be processed 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 www.general.co.nz.           

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

Your continued support is noted and appreciated.