Ticker:  LBS

Website: www.loansociety.co.nz

General manager: John Moore

Chairman: George Brown

Annual meeting date: TBC - expected July 2007

Shares.net.nz comment

The Loan and Building Society has been trusted since 1909 so shareholders can certainly say they have history on their side.

This year the company produced a profit of $1.032 million verses $911,000 for the previous corresponding period.

Asset growth increased by 19% and lending growth 22% while profit grew 13.3%.

Loan and Building Society is a parochial company and proudly states that the company is "locally owned and operated" with $108.4 million or 82% of lending is in the Canterbury region and only 3% of lending is in the North Island. 95% of all depositors live in the Canterbury region, as do all the society's directors. No doubt they probably believe Dan Carter is the best rugby player in the world.

Financial Comments

Loan and Building Society has 4,000,000 shares on issue @ $4.30 giving a market cap of $17,200,000. The profit for next year should be around $1.2 million with the extra $3.9 million from the rights issue. This would place the stock on a pe ratio of  14.3 which is about what one would expect for such a tightly held stock.

Company comments on its latest result

LBS's 05/06 financial year was underpinned by strong growth and expansion on several fronts, Chairman George Brown said in June when announcing a record after-tax profit for the society of just over $1 million.

"These (growth milestones) included a successful capital-raising of $3.8 million through the issue of one million new shares mid-way through the year," he said.

"We also lifted mortgage lending by 22 per cent to $132 million for the year, with no bad debt write-offs. This shows the quality and robustness of our lending activities, coupled with demand for our services from a solid platform of rural, business and residential clients."

Latest financial result (full year)

Audited figures for the year to March 31, 2006

(Released 13 June, 2006 - figures in $'million)

                                                This year            Previous year               Change

Assets                                      148                  124                              +19%

Advances                                 132                  108                              +22%

Shareholders Funds               19.9                 10.3                             +44%

Pretax surplus/(deficit)            1.551               1.368                           +13%

Net profit/(loss)                        1.032               0.911                           +13%

Recent milestones

April 2006             Rangiora's first building society has opened for business in High Street as the Loan and Building Society launches its maiden branch operation outside Ashburton. Since 1909 the Loan Society has steadily expanded its banking and financial services in Mid-Canterbury and sees excellent growth prospects for North Canterbury, Chairman George Brown said. The society intended to grow its Rangiora base by providing personalised, responsive services to account holders and offering competitive banking products.

December 2005    LBS issues 1 million new ordinary shares, taking the total number of shares on issue to 4 million.

December 2003    LBS's listing on the AX has resulted in a surge in market interest, the Society said. Chairman, George Brown, said investor enquiries in the past past month had helped lift the building society's share price from $2.75 at listing to $3.50. "While a shortage of sellers is limiting the volume of transactions, we are delighted the market recognises the performance of our mortgage-based lending activities," he said.

Company activities

Established in 1909, Loan and Building Society is a New Zealand owned retail-funded mortgage lender. It services 4,500 mainly South Island clients, offering financing and loans against first mortgages secured over residential dwellings, farms and commercial properties.