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Geneva reports $7.88m loss

Geneva Finance has reported a $7.88 million loss for the year to March 31 blaming a raft of factors for the result.

Monday, June 16th 2008, 9:08AM
It says the loss has come about because of the closure of the branch network; the restructure costs associated with the moratorium; an increase in provisioning levels; historical lending performance; and the disruption of collection activities during the moratorium.

Overall the company's revenue was down 15% to $28.4 million.

Geneva chief executive Shaun Riley says the results should be no surprise as "each of these factors was disclosed and discussed in the capital reconstruction offer document."

He says the board remains committed to delivering on the forecasts in that document.

He says Geneva's net asset backing at May 1 was 34.7c, compared to a forecast of 36.5c a share. Consequently Geneva intends to issue shares at no cost to the new shareholders to make up the difference.

Geneva is also acquiring Stellar Collections and Quest Insurance which will give an additional $1.9 million of security to debenture holders and subordinated note holders. Geneva will issue shares to acquire Stellar Collections, which provides debt collection services to Geneva and other institutions, and Quest, an insurance company which provides products to Geneva customers.

"While the debenture holders of Geneva currently have a charge over the shares, with this purchase Geneva will have direct access to the profits and equity. This transaction significantly strengthens Geneva," Riley says.

The value of $1.9 million is the liquidation value of the shares; the going concern value is $4 million.

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