That was up slightly from the previous year's $4.6 million loss and is NZF's third consecutive annual loss. The company says it "can only be described as another extremely difficult and challenging year for the financial services sector in New Zealand."

The loss was primarily due to its property finance division posting a pre-tax $5.4 million loss compared with an $0.9 million profit the previous year. Of the loss, $5.1 million was loan impairment and bad debt costs.

The company says the expiry of its government guarantee on October 12 last year "put unnatural pressures on cash flows" and its debenture funding fell to just $20.9 million at March 31 from $63.8 million a year earlier.

NZF says because of the pressure to repay debenture holders about $42.9 million, in some cases it had to conduct mortgagee sales at prices less than previously expected.

However, NZF's balance sheet also includes an unexplained $84.6 million in "secured notes" at March 31 compared with none a year earlier. Its term loans fell to $111.5 million from $194.4 million a year earlier.

Chief executive Mark Thornton didn't return phone calls or reply to emailed questions.

Nevertheless, the company still had $5.7 million in cash at March 31 and it says its current debenture reinvestment rate is in excess of 50% with new investment rates showing significant improvement.

"The local property market is also showing signs of improvement with a clear need for established providers of non-bank finance."

NZF's home loans division remains profitable, although its pre-tax profit fell to $2.5 million from $4.2 million the previous year, and its financial services distribution operations, which include 50% of the Mike Pero Mortgages broking business, turned in a small $0.2 million profit compared with a $6.6 million loss the previous year. The latter included a nearly $7 million writedown of Mike Pero goodwill.

No mention was made of the company's efforts to attract new equity, something it has been seeking since early last year. The balance sheet showed net equity at $10.3 million at March 31, 4.1% of total assets.

Standard & Poor's has cut NZF subsidiary NZ Money's credit rating twice so far this year from "B" to "CCC-" and still has it on negative watch.