Half-Year Report
Perth, Feb 28, 2017 AEST (ABN Newswire) - The directors of Cash Converters International Limited (
ASX:CCV) (CKKIF:OTCMKTS) (the Company) submit the report of the Company for the half-year ended 31 December 2016.
As previously advised to the market, Cash Converters International Limited is currently focussed on continuing to meet the needs of our customers and maximising the value of our brand and franchise network while we execute the strategy announced to the market last year. The transition of the Company to one with a more balanced risk return profile has negatively impacted the Group's financial services operations in the small amount credit contract (SACC) market resulting in EBITDA profit for the period down 31.8% to $25.7 million on the previous corresponding period (pcp).
Major highlights for the half-year include:
- 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 MACC market. New product opportunities have been initiated 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 $5,000 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 enhance the return on assets through a focus on better quality customers.
o Investment in the online channel continues to deliver pleasing results with Webshop retail sales up 36.5%, 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 the six months to 31 December 2016 of $143.5 million, was down 7.8% on the pcp.
- Net Profit After Tax (NPAT) of $11.5 million was also in line with expectations, however down 27.9% compared to prior corresponding period due to lower financial services revenue.
- Corporate head office costs have increased predominantly due to the Company's focus on improved regulation and compliance.
- The UK business has completed its transformation back to a master franchise, returning EBITDA for the six-month period of $1 million which was an improvement of $2.1 million over the prior period (pcp loss of $1.1 million).
- Retail and pawn broking continue to strengthen in the store network with revenue increases of 5.8% and 3.3% respectively; underlying the core value proposition for our customers centred around the Company's expansive shop front presence.
To view the full report, please visit:
http://abnnewswire.net/lnk/QTK4MV1T
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.
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