Friday 01 May 2015 by Company updates

Cash Converters 3Q15 - Continued solid growth

Revenue up 9.7% to $93.6m based on strong Australian demand


Cash Converters (CCV) reported top line increases in revenue up 9.7% to $93.6m, and EBITDA up 12.1% to $16.3m, for 3Q15 compared the corresponding quarter. Strong demand in Australia for financial services continues to drive the group’s growth, while UK operations continue to be a drag on earnings as CCV adjusts to the new regulatory regime.

CCV 3Q15 financial results summary table
Source: FIIG Securities, Cash Converters


Australia:

    • The personal loan book was $110.5m as at 31 March 2015 representing growth of 10.2% compared to the corresponding quarter but down 4.5% from the 31 December 2014 given the seasonal growth to Christmas.  Bad debts written-off or provided for were approximately $3m, which is lower than the ratio of loan book growth (suggesting this has ticked down as a percentage)
    • Cash advance loans increased 2.4% to $60.6m driven by online business
    • Savings from the termination of the Kentsleigh/Cliffview licence amounted to $1.45m
    • Corporate store revenue increased 8.2% to $46.7m due to the ongoing expansion of the network
    • The Green Light Auto Group business reported an EBITDA loss of $694,260 driven by costs associated with opening a new distribution outlet in NSW, departure of the National Sales Manager, and collections issues driven by problems with new software

United Kingdom:

    • The UK business remains under pressure following the implementation of the new regulatory regime however it is only a small contributor to the overall group profit
    • CCV are reviewing operations to better understanding of the returns available and then intend to structure the business accordingly
    • Losses increased 95% to $1.5m driven by restructure expenses. Cost savings are expected going forward