GMY - Goldfields Money - Aussie Stock Forums

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    Post GMY - Goldfields Money

    Goldfields Money Limited (GMY) currently provides a broad range of retail banking products and services for its Members, such as home or personal loans, term deposits, savings accounts and cash management facilities.

    GMY is expected to list on the ASX on Tuesday, May 22.

    Last edited by Joe Blow; 21st-May-2012 at 03:07 PM. Reason: Update

  2. #2
    Make the drill work for YOU springhill's Avatar
    Join Date
    Jun 2007
    Mental Institution

    Default Re: GMY - Goldfields Money

    MC - $15m
    SP - 95.5c
    Shares - 15.6m
    Options - Nil listed
    Cash -

    Top 5 Shareholders
    1. Rocket Science Pty Ltd 6.8%
    2. Dreampoint Investments Pty Ltd 3.7%
    3. Kemast Investments Pty Ltd 2.2%
    4. Wulura Investments Pty Ltd 2.2%
    5. Jasper Hill Resources Pty Ltd 2.2%

    Financial Summary
    • As a credit union, growth has been constrained by a declining member base (3,527 in 2005 versus 2,643 at demutualisation) and an inability to raise new capital.
    • Ability to invest in developing new products and services was constrained by the low level of capital.
    • Goldfields had a conservative approach with a Capital Adequacy Ratio significantly higher than other credit unions (20.7% compared to an average of circa 17.7%).
    • FY11 normalised NPAT (ex demutualisation costs) of $570,000 represented a return on year end equity of 9.9% versus a 7 year average normalised historic return on equity of 11.1%.
    • FY’12 NPAT guidance from the February 12 Prospectus is for $410,000 or $566,000 normalised . The implied post IPO Net Assets at 30 June ‘12 are likely to be circa $14m or approximately 89’ps.

    Return on Equity – Target of 10%
    • Goldfields ROE ranged from 7% to 15% over the last 7 years with normalised FY2011 being 9.9%.
    • Major Banks ROE of 16.7% compared with Regional Banks of 6.7%
    • Objective is to limit erosion of recent profitability whilst implementing a growth strategy, which introduces new costs ahead of revenues.
    • Goldfields’ target ROE is 10% and are seeking to achieve this run-rate over the second year after demutualisation, ie around June’14.

    Capital Surplus Following a $9m IPO
    • Current Capital Adequacy Ratio (CAR) of 40% (as per Prospectus forecast) compared to Board internally assessed minimum CAR requirement of 20%.
    • Housing Loans of approximately $88m can be settled before additional capital is required.

    • Adopting a 20% Capital Adequacy Ratio from a $14m equity base Goldfields can grow out its business to total assets of circa $146m.
    • Within the growth costs involved in building Goldfields, the target is for a 10% ROE.

    Growing The Loan Book
    • Key Drivers
    – Average Home Loan size of $281,000 (source: ABS Housing Finance)
    • To lend a new $88m by June 2014 Goldfields would need to make 313 average sized home loans.
    • As the property sector in Western Australia lifts of current depressed levels, Goldfields believe this is very achievable.
    • Margin Management
    – Higher yielding products – personal and commercial loans (capped at approximately 15% of portfolio)
    – Limit discounting where possible – highlight service offering
    • Channels
    – Development of package aimed at key WA based Business
    – Accountants, Real Estate Agents; Financial Planners
    – Easy to apply online; quick answer and response

    Sourcing Deposits
    • Key Drivers
    – Funding of $3.6m per month required to meet lending targets. A soft single channel launch in June 2012 has enabled Goldfields to secure funding generally of this magnitude for both June and July.
    • Margin Management
    – Lower yielding products:
    • Cash Management Account (subject to business case).
    • Online savings account .
    • Launch of new transaction account: eg 2% interest if you put your payroll through it; linked to loan account offering.
    • Channels
    – Part of integrated package offering .
    – Shareholder package.
    – Replicate high net worth deposit service.
    – Distributor relationships.
    • Marketing
    – Key point of advertising emphasising the $250,000 Government Guarantee on deposits – official seal to be used on advertising and on the website.

    Net Interest Margin
    • Current Goldfields Money Margin is approximately 2.6%.
    • Peer analysis would suggest this will reduce with growth, which has been factored into Goldfields’ strategy.

    Other Profit Drivers
    • Non Interest Income
    – Review of current fee structures to ensure both competitiveness and cost recovery.
    – “Not ashamed” to charge fee for good service.
    – Ancillary relationships e.g. insurance; financial planning.
    • Expenditure control
    – Continuing tight control over all expenditure. Initial fixed cost investment required to drive the growth strategy.
    • Liquidity / Treasury management
    – Opportunities to maximize earnings from excess liquidity within strict policy guidelines.

    Key Risks
    • Provisioning
    – Loan book is currently well secured and modest arrears are been managed effectively. There is no intention to materially increase the risk profile.
    • RBA Interest rate reductions
    – Current structure of the loans and deposits portfolio reduces earnings when interest rates are reduced. Introduction of Fixed Rate Home Loans will manage some of the interest rate risk in the short term.
    • Competition
    – Significant competition continues to exist for both loans and deposits including the potential for relaxation of credit standards from some competitors.
    • Economy Deteriorates
    – Global factors continue to weigh on confidence in the Australian context. Western Australia continues to have a bright outlook.
    • Regulation
    – Increasing compliance burden from Australian regulators in response to global factors.
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    "You have enemies? Good. That means that you've stood up for something, sometime in your life" - Winston Churchill

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    Default Re: GMY - Goldfields Money

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