TIDMCCVU
RNS Number : 5856K
Cash Converters International Ld
23 August 2012
23 August 2012
Cash Converters International Limited
Chairman and Managing Director's Review
The directors of Cash Converters International Limited ('Cash
Converters') are pleased to report a growth in revenue of 25.7% to
$234.3 million and a record profit result of $29.4 million for the
2012 financial year, an increase of 6.2% over the previous
year.
On an adjusted basis, excluding one-off items, the net profit
after tax was $32.6 million compared to an adjusted net profit of
$29.7 million in the corresponding period last year representing an
increase of 9.8%. The statutory earnings per share were 7.75 cents
per share (an increase of 6.5% on the previous corresponding
period) and the adjusted earnings per share were 8.58 cents per
share (an increase of 9.8% on the previous corresponding
period).
The reported net profit after tax was impacted by the following
expenses (pre-tax effect), most of which are non-recurring:
Reported net profit after tax: $29.4m
- stamp duty on acquisition of new stores $665k
- independent IT review $53k
- store acquisition additional earn-out payment $1,756k
- additional legal and professional fees $615ka
- redundancy costs $88k
Adjusted net profit after tax: $32.6m
The majority of the one-off costs were incurred in the first
half of the financial year.
The legal and professional fees noted above include costs
incurred relating to the proposed Ezcorp Inc strategic alliance
which was terminated during the first half of the financial
year.
The business also incurred the following additional costs that
were not incurred in the corresponding period last year:
Additional costs:
- Share based long term incentives $1,255k
Investing for the future:
- Additional interest costs $1,392k
- Additional brand and public relations costs $182k
- Additional support staff costs $905k
The investment associated with the implementation of the growth
strategy transforming the company from a franchisor to a large,
international entity, with our own store network and rapidly
growing range of financial services products, has impacted the full
year results, due to the increased corporate overheads necessary to
drive the next stage of expansion.
This investment in overheads and personnel is significant but
will be proportionally lower as the scale of the organisation grows
and the costs are amortised over a far larger business.
The table below provides a summary of the financial
performance.
Financial Results Summary
30 June 30 June Variance
2012 2011
$ $ %
------------------------------- ------------- ------------- ---------
Revenue 234,354,795 186,384,204 25.7
------------------------------- ------------- ------------- ---------
EBITDA 48,105,111 43,231,175 11.3
------------------------------- ------------- ------------- ---------
Depreciation and amortisation (4,291,780) (2,964,480) 44.8
------------------------------- ============= ============= =========
EBIT 43,813,331 40,266,695 8.8
------------------------------- ------------- ------------- ---------
Income tax (12,009,250) (11,578,126) 3.7
------------------------------- ------------- ------------- ---------
Finance costs (2,388,057) (996,136) 139.7
------------------------------- ============= ============= =========
Net profit before minority
interests 29,416,024 27,692,433 6.2
------------------------------- ------------- ------------- ---------
Less minority interests - -
------------------------------- ============= ============= =========
Net profit after minority
interests 29,416,024 27,692,433 6.2
------------------------------- ------------- ------------- ---------
Basic earnings per
share 7.75 7.28 6.5
------------------------------- ------------- ------------- ---------
Divisional operating 30 June 30 June Variance
profit 2012 2011 %
------------------------------- ------------- ------------- ---------
Franchise operations 6,054,033 6,509,558 -7.0
------------------------------- ------------- ------------- ---------
Store operations 5,628,791 8,569,649 -34.3
------------------------------- ------------- ------------- ---------
Financial services
- administration 13,651,754 12,319,667 10.8
------------------------------- ------------- ------------- ---------
Financial services
- personal loans 33,477,570 24,420,011 37.1
------------------------------- ============= ============= =========
Total 58,812,148 51,818,885 13.5
------------------------------- ------------- ------------- ---------
Corporate head office
costs (17,386,874) (12,548,326) 38.6
------------------------------- ------------- ------------- ---------
Total divisional operating
profit before tax and
minority interest 41,425,274 39,270,559 5.5
------------------------------- ============= ============= =========
Highlights
- Revenue growth of 25.7% to $234.3 million. The major drivers
for revenue growth over the year included an increase in personal
loan interest of $21.6 million and establishment fees of $7.1
million, an increase in corporate store revenue of $22.0 million
and an increase in cash advance administration fees of $2.7
million.
- The statutory earnings per share were 7.75 cents per share (an
increase of 6.5% on the previous corresponding period) and the
adjusted earnings per share were 8.58 cents per share (an increase
of 9.8% on the previous corresponding period).
- UK cash advance and personal loans business up 285.7% to a
combined EBIT of $4.6 million, an outstanding result for a business
launched in May 2010.
- The growth of the online personal loan business in Australia
continues to be very strong with the value of loans written
increasing 126.7% to $14.2 million (2011 $6.3 million). There
continues to be a very high percentage of first time customers
(76%), which suggests a significant untapped market for the
Company.
- The personal loan book in Australia grew 28.0% to $67.6
million and the loan book in the UK grew 154.0% to GBP12.7 million.
The personal loans business generated an EBIT of $33.5 million
(2011 $24.4 million) which is 37.1% up on the previous year.
- The cash advance administration platform in Australia and the
UK, generated an EBIT of $13.6 million (2011 $12.3 million) which
is up 10.8% on the previous year.
- 12 'greenfield' company owned stores were opened in the UK and
one in Australia, taking total corporate store numbers as at 30
June 2012 to 102 (59 in the UK and 43 in Australia).
- The corporate store network in the UK and Australia has seen
revenue grow by 21.8% to $122.8 million producing a combined EBIT
of $5.6 million. On an adjusted basis, after adding back one off
costs of stamp duty of $0.7 million and an earn-out payment on new
store acquisitions, the EBIT was $8.1 million; (2011 $8.6 million).
As expected and previously disclosed, the impact of the profit drag
from opening 27 new stores in both Australia and the UK in 2011 and
2012 has reduced the result. On average, it takes at least 12
months from the establishment a new store until it reaches
break-even point. The corporate store network has been an important
platform for the ongoing growth in our financial product range.
Dividend
The directors have declared a fully franked final dividend of
1.75 cents per share. The dividend will be paid on 28 September
2012 to those shareholders on the register at the close of business
on 14 September 2012. This will take the total dividend payment for
the year to 3.5 cents per share, fully franked. This represents a
payout ratio of approximately 45% of net profit after tax.
Some key Finance division statistics for the twelve months
ending 30 June 2012:
Australia
Cash Advance
- Total principal loaned increased by 12.3% to $229.8 million
- Average loan amount increased from $325 to $331
- Total customer numbers increased by 16.8% to 403,137
Personal Loans
- Total number of loans approved increased by 34.7% to 106,779
- Total number of active customers increased by 31.5% to 66,760
- Loan Book increased by 28.0% to $67.6 million
United Kingdom
Cash Advance
- Total principal loaned increased by 177.3% to GBP29.1 million
- Average loan amount increased from GBP104 to GBP121
- Total customer numbers increased by 136.8% to 75,169
Personal Loans
- Total number of loans approved increased by 76.7% to 28,234
- Total number of active customers increased by 70% to 19,252
- Loan Book increased by 154.0% to GBP12.7 million
Personal Loan and Cash Advance Highlights
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