- Definition of small amount credit contracts: Loans for a term
of at least 16 days but not exceeding 1 year and for an amount not
exceeding $2,000.
- Fees and charges: An establishment fee is permitted capped at
20% of the loan amount which is actually received by the borrower.
A monthly fee of 4% can be charged. This is a flat charge on the
original amount lent (excluding any fees and charges included in
the loan amount). It can be charged for a month or part of a
month.
- There is a 200% total cap on what can be recovered from a
borrower. This effectively means that the total fees and charges
cannot exceed the amount which the borrower receives.
- Protected Earnings Amount: For Centrelink dependent consumers
(whose predominant source of income is Centrelink benefits), the
amount of the loan repayments is capped at 20% of their income.
The Minister Bill Shorten is quoted as saying;
"This Government believes there is a place in the economy for
legitimate short term small amount lending. These loans are
appropriate to fill in the gaps for people who need a temporary
cash injection".
This outcome from the legislative process is positive for Cash
Converters as a significant proportion of our earnings are
generated from the provision of short term credit. These rate caps
give us a sustainable business model that will see these earnings
increase as our volumes continue to grow. The legislation also
provides a framework to regulate the industry and therefore protect
vulnerable members of society from unscrupulous operators.
Throughout this long process of engagement with Government it is
pleasing to see its acknowledgement that we have a legitimate role
to play in providing credit and that by adopting a fee cap that
allows us to recoup the significant establishment costs up front,
it shows their understanding of one of the reasons that short term
credit has a high cost. In addition, this legislation should
provide Cash Converters with a competitive advantage in this market
space and we expect that a number of smaller providers, who do not
have adequate systems and standards in place to meet these
provisions, will need to adapt, or move out of the industry.
Outlook
Cash Converters expects continued growth in its Australian and
UK financial services operations over the coming financial year.
There are also a number of store acquisitions available to the
Company in Australia in addition to planned "greenfield" locations.
Further investment will be made into increasing the loan books and
store network. With high levels of growth expected across the
business, the Company is currently reviewing funding opportunities,
including partial securitisation of the loan books.
Following our strong result this year, we are well positioned to
drive further growth across all aspects of the business. The
outlook has never been brighter for the Company. We now have
resolution to the legislative uncertainty that has clouded a
significant portion of our business for a very long time. We can
now act with greater certainty and confidence in investing for
further growth.
The next twelve months will see the Company reap the reward from
its investment in the launch of its finance products into the UK
market and from our corporate store strategy. In addition the
Company's commitment to becoming a serious player in the online
space will also return growth through its lending and shopping
channels.
In closing we wish to thank the staff, management and
franchisees for their contributions to the strong financial result
this year.
Reginald Webb
Chairman
Peter Cumins
Managing Director
Perth, Western Australia
Date: 23 August 2012
Enquiries
Cash Converters International
Limited
Mr D.R. Groom +61 (8) 9221 9111
Charles Stanley Securities
Dugald J.Carlean/ Karri
Vuori +44 (0) 20 7149 6000
APPENDIX 4E
Cash Converters International Limited
ABN: 39 069 141 546
Financial year ended 30 June 2012
- Revenues from ordinary activities up 25.7% to $234,354,795;
- Profit from ordinary activities after tax up 6.2% to $29,416,024;
- Net profit attributable to members up by 6.2% to $29,416,024;
- The directors of the Company paid a fully franked interim
dividend of 1.75 (one and three quarter) cents per share on 30
March 2012. The directors have also declared a final fully franked
dividend of 1.75 (one and three quarter) cents per share to be paid
on 28 September 2012 to those shareholders on the register at the
close of business on 14 September 2012;
'This report should be read in conjunction with any
announcements made in the period by the Company in accordance with
the continuous disclosure requirements of the Corporations Act 2001
and the ASX Listing Rules'.
Dividends
The directors of the Company paid a fully franked interim
dividend of 1.75 (one and three quarter) cents per share on 30
March 2012. The directors have also declared a final fully franked
dividend of 1.75 (one and three quarter) cents per share to be paid
on 28 September 2012 to those shareholders on the register at the
close of business on 14 September 2012.
Net tangible assets per security
For the current period (30 June 2012) the net tangible assets
per security are $0.2348.
For the corresponding period (30 June 2011) they were
$0.2029.
Details over entities over which control has been gained or
lost
Not applicable - The Company has not made any acquisitions or
disposals during the current year.
Details of associates and joint venture entities
Not applicable - The Company has no associates or joint venture
entities.
Chairman's and Managing Director's review
For a commentary on the results for the period please refer to
the Chairman and Managing Director's review lodged with this
appendix.
Earnings per security
The basic earnings per share for this period are 7.75 cents per
share;
The diluted earnings per share for this period are 7.63 cents
per share;
The basic earnings per share for the previous period are 7.28
cents per share;
The diluted earnings per share for the previous period are 7.23
cents per share;
Audited accounts
Appendix 4E has been prepared from accounts that are currently
in the process of being audited.
Ralph Groom
Company Secretary
23 August 2012
Consolidated statement of comprehensive income
Consolidated
Restated
2012 2011
$ $
Franchise fees 10,470,248 11,263,886
Financial services revenue 88,867,388 58,456,503
Sale of goods 87,219,838 73,430,360
Pawn services fees 15,063,225 12,245,282
Financial services commission 31,924,510 29,706,157
Other revenue 809,586 1,282,016
------------- -------------
Revenue 234,354,795 186,384,204
Cost of Sales (76,844,286) (58,334,478)
------------- -------------
157,510,509 128,049,726
Other income - 1,173,933
Administration expenses (55,059,600) (42,908,894)
Advertising expenses (4,747,899) (7,198,614)
Occupancy expenses (12,737,066) (9,221,525)
Other expenses (41,152,613) (29,627,931)
Finance costs (2,388,057) (996,136)
Profit before income tax
expense 41,425,274 39,270,559
Income tax expense (12,009,250) (11,578,126)
Profit for the year 29,416,024 27,692,433
============= =============
Other comprehensive income
Exchange differences on
translation of foreign
operations (1,001,398) (3,605,578)
------------- -------------
Other comprehensive income
for the period (1,001,398) (3,605,578)
------------- -------------
Total comprehensive income
for the period 28,414,626 24,086,855
============= =============
Profit attributable to:
Owners of the parent 29,416,024 27,692,433
Non-controlling interest - -
------------- -------------
29,416,024 27,692,433
============= =============
Total comprehensive income
attributable to:
Owners of the parent 28,414,626 24,086,855
Non-controlling interest - -
------------- -------------
28,414,626 24,086,855
============= =============
Earnings per share
Basic (cents per share) 7.75 7.28
Diluted (cents per share) 7.63 7.23
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