File picture: Philimon Bulawayo
File picture: Philimon Bulawayo

JOHANNESBURG - Finbond Group shares shot up nearly 8percent in early trade on the JSE yesterday after the company told its shareholders that it expected a surge in profits in the six months to August.

The group said basic and headlines earnings a share would rise between 85percent and 94percent compared with the same period last year. The share price responded positively yesterday to the news, gaining 25cents to R3.44 a share, from Wednesday’s closing price of R3.19. It closed 6.58 percent up at R3.40.

“A review of the financial results for the six months to end August by the directors of the company has indicated that both basic and headline earnings per share are expected to increase to between 12.4c and 13c a share compared with 6.7c a share for the six months to end August 2016, representing a percentage improvement of between 85and 94percent,” the group said.

Finbond is a leading North American and South African financial services institution that specialises in the design and delivery of unique value and solution-based savings, credit and insurance solutions tailored around depositor and borrower requirements rather than institutionalised policies and practices.

Finbond operates two divisions: micro-credit products and investment and savings products. In the year to end February results, Finbond said its branches in South Africa had increased by 35 to 379.

The group said that as part of its client-centric focus, it ensured that its distribution channels reflected the demographics of its clients. The increase in branches was achieved at the back of a strong set of results in which it reported a 77percent increase in headline earnings per share and a 194percent increase in the operating profit from continuing operations to R279.4m.

The group attributed the results to its expansion to the US, strong focus on its core short-term lending business, conservative lending business and strict upfront credit scoring procedures. Finbond performed well in the US and Canada as it increased its branch network from 91 to 171 branches. It intended opening 40 more branches in South Africa in the year ahead and expanding its network in the US with an additional 80 branches.

Finbond is expected to release its results next week.

- BUSINESS REPORT