No mention of current profitability of the Go Car Finance...

No mention of current profitability of the Go Car Finance business is a bit of negative for me. I also missed the conference call because so little notice was given, does not appear to be a recording of this at this stage either.

However, in terms of what we do know, Go Car Finance (GCF) has a loan book of NZ50m, and total price payed, including earn-outs, is NZ24m. I have checked the GCF website and it appears that it has very similar rates to MNY, circa 25-30% APR plus a myriad of additional fees. GCF offers various 'insurance' options for borrowers for a fee, such as a borrower losing their job and GCF reducing the payments for a period of time, a novel idea although probably ill advised from a customer point of view. So, I think it 's safe to assume that GCF would make around NZ5m NPAT (10% ROC) on a loan book of that size and with similar rates to MNY. Therefore, MNY seems to be paying about 5-6 times NPAT for an initial ROI of 20% (5/24=20%). It was mentioned GCF has it's own finance sorted and this also likely means growth on that figure medium term, seems like a very attractive price, in addition to the qualitative factor of KMP being retained for 3yrs and 33% of total consideration deferred on performance. Naturally that NPAT figure is a guess and GCF may make much less than that, and perhaps no mention of it's profitability implies that, though that ROC figure is certainly achievable in near future nonetheless.

https://www.gocar.co.nz/important-information/responsible-lending