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Slovar Limited Interim / Quarterly Report 2016
17773_rns_2016-03-14_578c7d98-cfd1-41fb-8a0c-fe77c7aac8d0.pdf
Interim / Quarterly Report
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Pie Funds Small Cap Conference
15th March 2016
Ray Malone | Chairman
Scott Baldwin | Managing Director
Contact: +61 3 9093 8255
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Divisions and Product Matrix
| BROKER | BRANCH | ONLINE | |
|---|---|---|---|
| Brand | money3 | money3 | money3 |
| Coverage | Broker representation across all states | Branded Branches across NSW, QLD, SA, TAS, VIC | National Online representation |
| Loan Range | $2,000 - $35,000 secured auto finance, 24 – 60 month terms | $100 - $5,000 unsecured loans, up to 24 month terms | Cash Train: $200 - $5,000 unsecured loans, up to 24 month terms |
| Money3: Online access for consumers to Broker and Branch product offerings | |||
| EBITDA Contribution (pre Corporate Overheads) | 69.8% | 22.0% | 8.2% |
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H1 FY16 Financial Highlights
- Revenue increased 45.4% on prior corresponding period (PCP) to $47.4M
- NPAT increased 37.3% on PCP to $10.0M
- Basic EPS increased 13.3% on PCP to 7.6 cents per share
- Broker division continues to drive growth in the loan book and delivered impressive revenue and EBITDA contribution
- Branch division revenue remains consistent and continues to deliver solid EBITDA
- Online division delivered an increasing EBITDA contribution
- Dividend increased to 2.75 cents per share, fully franked (up 10% on PCP). DRP will continue to operate with 5% discount.
- $19.2m capital raising completed in December 2015 to enable to company to continue to grow in H2FY16
- Board renewal and management changes focused on delivering long term shareholder value
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H1 FY16 Results
| H1 FY16 $ | ↑ ↓ % | H1 FY15 $ | |
|---|---|---|---|
| Revenue | 47,448,307 | 45.4 | 32,635,170 |
| Bad debts as % of revenue | 16.5% | 14.5% | |
| EBITDA | 17,141,341 | 44.8 | 11,838,616 |
| EBITDA as % of revenue | 36.2% | 36.5% | |
| EBIT | 16,506,996 | 42.8 | 11,562,760 |
| EBIT as % of revenue | 34.8% | 35.7% | |
| NPAT | 10,001,953 | 37.3 | 7,285,649 |
| NPAT as % of revenue | 21.1% | 22.3% | |
| Basic EPS (cents) | 7.60 | 13.3 | 6.71 |
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Divisional Analysis
BROKER
BRANCH
ONLINE
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Key Financials Trends by Division
- Revenue growth continues
- EBITDA growth for Broker the standout performer
- Online a rising star, delivering impressive returns since Cash Train acquisition
- Loan book growth underpinning future revenue growth
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- Net Receivables is before provision for doubtful debts and excludes deferred revenue
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H1 FY16 Results – Broker Division
| H1 FY16 $ | ↑ ↓ % | H1 FY15 $ | |
|---|---|---|---|
| Revenue | 21,623,158 | 60.1 | 13,509,584 |
| Bad debts as % of revenue | 11.4% | 13.4% | |
| EBITDA | 15,516,290 | 66.7 | 9,309,452 |
| EBITDA as % of revenue | 71.8% | 68.9% | |
| Number of loans | 5,304 | 31.5 | 4,032 |
| Average net loans receivable (loan book) | 107,700,867 | 72.8 | 62,336,469 |
Financial Performance
- Growth in Broker loan book and revenue has been driven by expanding the broker network, increasing internal sales and repeat customers cycling through the loan period
- EBITDA as a percentage of revenue continues to improve, leveraging scale
- Bad debts as a percentage of revenue at expected levels
- Further opportunities to expand national broker footprint and increase product offerings providing significant future growth opportunities
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H1 FY16 Results – Branch Division
| H1 FY16 $ | % | H1 FY15 $ | |
|---|---|---|---|
| Revenue | 17,094,885 | (0.8) | 17,233,830 |
| Bad debts as % of revenue | 27.4% | 18.4% | |
| EBITDA | 4,915,765 | (27.9) | 6,818,970 |
| EBITDA as % of revenue | 28.8% | 39.6% | |
| Number of loans | 75,943 | 5.1 | 72,254 |
| Average net loans receivable (loan book) | 29,369,213 | 6.8 | 27,509,918 |
Financial Performance
- Mature Branch division with stable loan book
- Remains consistent contributor of revenue and delivering solid returns
- Bad debts as a % of revenue (post recoveries in Corporate) H1 FY16 20.1% (H1 FY15 14.4%)
- Several branches identified to merge with neighbouring branches, providing cost savings
- Opportunities to introduce new product offerings, review product mix, increase referral capability to Broker division
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H1 FY16 Results – Online Division
| H1 FY16 $ | % | H1 FY15 $ | |
|---|---|---|---|
| Revenue | 8,626,440 | N/A* | 1,632,271 |
| Bad debts as % of revenue | 22.0% | 30.5% | |
| EBITDA | 1,808,545 | N/A* | 206,482 |
| EBITDA as % of revenue | 21.0% | 12.6% | |
| Number of loans | 36,669 | N/A* | 5,831 |
| Average net loans receivable (loan book) | 11,303,701 | N/A* | 3,972,311 |
Financial Performance
- The acquisition of Cash Train in Dec 14 delivered significant strategic capability in online lending, previously a modest contributor to revenue and profit
- Cash Train integration almost complete, best practice online processes being leveraged across entire lending platform
- Cash Train profitable and growing contributor to group EBITDA
- Bad debts as a % of revenue improving, in line with expectations
- Poised well to continue to deliver growth, including cross selling opportunities to Broker division
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- Cash Train acquisition in December 2014, comparative 1 month only
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Opportunities
Increase market share
- Expand broker network
- Expand online presence
- Target niche customers
Operational Efficiencies
- Merge selected branches
- Consolidate loan management platforms
- Further develop online interfaces with key brokers to improve processing time
Product expansion
- Introduction of secured loan product for new assets
- Enhance unsecured loan offering
- Promote cross selling opportunities across all three distribution channels
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Outlook
Key Priorities
- Secure debt funding to continue growth of loan book
- Leverage online capability across all Money3 digital assets
- Improve operational performance in Branch Division
Forecast
- Maintain FY16 full year guidance of NPAT of $19.0M, up 36.3% on FY15 NPAT of $13.9M
Unsecured Lending
- Range of options to exit SACC operations were considered – resolved not to pursue these options as they do not represent the best strategic or long term shareholder value
- Continue to review the composition and product mix of unsecured lending
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Disclaimer
The following disclaimer applies to this presentation and any information provided in this presentation (Information). You are advised to read this disclaimer carefully before reading or making any other use of this presentation or any Information.
This presentation has been prepared by Money3 Corporation Limited ABN 63 117 296 143 (Money3) on information available at the time of its preparation.
The Information is in summary form and does not purport to be complete. Except as required by law, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, reliability or correctness of the Information, opinions or conclusions, or as to the reasonableness of any assumptions.
Certain statements, particularly those regarding possible or assumed future performance, costs, returns, prices, potential business growth, industry growth or other trend projections, and any estimated company earnings or other performance measures, are, or may be, forward looking statements. Such statements relate to future events and expectations and as such involve unknown risks and uncertainties, many of which are outside the control of or unknown to Money3 and its officers, employees, agents or associates. Actual results, performance or achievement may vary materially from any forward looking statements and the assumptions on which those are based, and such variations are normal and to be expected.
The Information also assumes the success of Money3's business strategies. The success of the strategies is subject to uncertainties and contingencies beyond Money3's control, and no assurance can be given that the anticipated benefits from the strategies will be realised in the periods for which forecasts have been prepared or otherwise. Given these uncertainties, Money3 cautions investors and potential investors not to place undue reliance on these forward-looking statements.
The Information may be changed at any time in Money3's absolute discretion and without notice to you. Money3 undertakes no obligation to revise the forward looking statements included in this presentation to reflect any future events or circumstances. Except as required by law or any relevant regulatory authority.
The release, publication or distribution of this Information in jurisdictions outside of Australia may be restricted by law and you should observe any such restrictions. This Information does not constitute investment, legal, accounting regulatory, taxation or other advice and the Information does not take into account your investment objectives or legal, accounting, regulatory, taxation or financial situation or particular needs. You are solely responsible for forming your own opinions and conclusions on such matters and for making your own independent assessment of the Information. You are solely responsible for seeking independent professional advice in relation to the Information and any action taken on the basis of the Information. No responsibility or liability is accepted by Money3 or any of its officers, employees, agents or associates for any of the Information or for any action taken by you on the basis of the information.
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