Recently appointed Chief Executive Officer, Mark Reid, commented: "Following the announcement in 2016 of a new strategy for the Company focused on building sustainable growth for the long term, this is a pleasing result. The Company is progressing through a period of strategic transition and during the half year we achieved a number of milestones in this regard on or ahead of schedule.
"Throughout FY2017, the core focus for the Company is continuing to meet the needs of our customers and strengthening our compliance systems, policies and processes, which is creating the foundation for sustained, positive results from FY2018 and well into the future. Cash Converters remains on-track to deliver the previously announced NPAT guidance for FY2017 of $20 million to $23 million."
- The Company has made considerable progress on delivering the strategic changes, as outlined in the 2016 Annual Report, during the six months to 31 December 2016, including:
o Successful entry into the Medium Amount Credit Contracts (MACC) market. New product opportunities have begun to take shape with the launch in October 2016 of higher value loans, in-store and online, under the MACC regulations. The Company is now offering loans up to $5000 for eligible customers, presenting a significant growth opportunity for 2H 2017 and beyond.
o Company-wide focus on strengthening compliance and responsible lending systems, policies and procedures is well progressed. The proactive decision to comprehensively reposition the financial services operation resulted in an anticipated reduction to lending volumes for the six months to 31 December 2016. This repositioning will deliver an overall improvement in the quality of the loan book and drive up the return on assets through a focus on the acquisition of targeted customer segments.
o Investment in the online channel continues to deliver pleasing results with Webshop retail sales up 36.5% on the previous corresponding period (pcp), to $4.2 million, and online lending volumes exceeding in-store lending for the first time in January 2017 by $280K.
o Ongoing improvement in the already high levels of customer service and satisfaction, with very positive results achieved through third-party customer survey, including 93% of customers agreeing that "Cash Converters is a professional company to deal with" and 92% agreeing that "Cash Converters is a trusted and credible organisation".
o Further streamlining of the Company's organisational structure through attracting talent and reducing overhead costs remains a key focus in the months ahead.
- With the anticipated reduction in lending volumes, revenue for six months to 31 December 2016 of $143.5 million, was down 7.8% on pcp.
- NPAT of $11.5 million was also in line with expectations, however down 27.9% compared to pcp due to lower financial services revenue.
- The UK business has completed its transformation back to being a master franchisor, returning EBITDA for the six month period of $1 million which was an improvement of $2.1 million (pcp, loss $1.1 million).
- Retail and pawnbroking revenue continue to strengthen in the store network increasing 5.8% and 3.3% on pcp respectively; reinforcing the core value proposition of the Company's expansive shop front presence.
- The Company expects to deliver the previously announced NPAT guidance for FY2017 of $20 million to $23 million, albeit at the lower end of that range.
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About Cash Converters International Ltd
Cash Converters International (ASX:CCV) is a franchised retail network listed on the ASX. It specialises in the sale of second-hand goods. The Cash Converters group employs modern retailing practices, professional management techniques and high ethical standards to the management of its stores throughout the chain which appeal to a wide cross section of the community. As a result, Cash Converters has been able to position its outlets as credible retail merchandise stores, resulting in a profitable market for the group.
Cash Converters International Ltd