18 Mar 2014

Dorchester buys Oxford Finance

8:18 am on 18 March 2014

Dorchester Pacific is increasing both its finance business and its exposure to the car business through its purchase of Oxford Finance.

Dorchester will more than double its finance loan book to nearly $90 million and is paying $11.3-$12.3 million for Oxford, depending on its earnings in the year ending March 2015.

Dorchester chief executive Paul Byrnes said it expected Oxford to contribute $3 million in operating earnings in that year.

As a result, Dorchester lifted its pre-tax profit forecast for the year ending March 2015 to between $10 and $11 million, and to between $14 and 15 million for the following year. Dorchester also owns just under 20 percent of Turners Auctions.

More than 70 percent of Oxford's loans were motor vehicle loans, a similar position to Dorchester's own lending, and the company would like to work more closely with Turners Auctions, Mr Byrnes said.

"Since we acquired our stake in Turners we've indicated that we would like to participate, as a provider of finance and insurance," he said.

"That hasn't changed. We have, in recent times, put a pilot scheme in to provide some insurance product on an arms length basis to Turners, so that's heading in the right direction.

"We're delighted with the performance of that business since we acquired it."

Oxford was founded in 1987 and bought by lines company Electra in 2003.