CHICAGO, Jan. 10, 2011 /PRNewswire/ -- Zacks.com Analyst
Blog features: Dollar Financial Corporation (Nasdaq:
DLLR), CapitalSource Inc. (NYSE: CSE),
MasterCard Inc. (NYSE: MA), Aegon NV (NYSE:
AEG) and Macy's Inc. (NYSE: M).
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Here are highlights from Friday's Analyst Blog:
Dollar Financial Expands in U.K. (revised)
In an attempt to expand its payday lending business in U.K.,
Dollar Financial U.K. Ltd., a wholly owned U.K. subsidiary
of Dollar Financial Corporation (Nasdaq: DLLR) has
agreed to acquire Purpose U.K. Holdings Limited for $195 million.
Purpose is a provider of online payday loans, which operates
under the brand PaydayUK in U.K. since 2003.
The deal is expected to complete in the next 90 days, which is
subjective to closing conditions and regulatory approval. Further,
the acquisition of Purpose would immediately add to the earnings of
Dollar Financial, which will be reflected in the earnings outlook
of 2010 that the company is expected to provide after the closure
of the deal.
Besides U.K., the company has expanded its footprint in
Mexico too. Dollar Financial is on
track acquiring payday lenders outside the U.S., as the company is
trying to curb its exposure to U.S. regulations, which targets at
limiting the interest rates. The regulation has capped the interest
rates on payday loans to 36% to support the low and middle income
families.
Apart from acquiring payday lending businesses, Dollar Financial
is vigorously pursuing its pawn lending business growth strategy
across product and geography, primarily in highly regulated pawn
lending markets such as Sweden and
Finland.
Recently in December 31, the U.K.
subsidiary of Dollar Financial, Dollar Financial U.K. Ltd.,
completed the acquisition of a leading pawn lending Scandinavian
company, Sefina Finance AB, for approximately $73 million in cash. The Sefina acquisition is
expected to be accretive immediately and Dollar Financial expects
the deal to be reflective in its earnings outlook for 2011.
In April 2010, Dollar Financial
acquired Suttons & Robertsons, the fourth-largest pawn-broking
business in the UK, for £15 million with additional potential
payments amounting to £2.5 million, over the next two years.
Further, in August 2010, Dollar
Financial agreed to buy Swedish Internet lending business Folkia
Group AS for $28 million.
Overall, Dollar Financial has been tapping on this growing
opportunity through mergers and acquisitions and we believe that
the acquisition of Purpose will strengthen the position of the
company as a leading provider of internet loans across U.K.
Moreover, Dollar Financial is expected to benefit from the solid
management team of Purpose, along with its strong business and
industry expertise, which will facilitate the expansion of the
global internet lending platform, both within the U.K. as well as
other countries in Europe and
Canada.
Though the company is on a business shopping spree, risks
related to its tax strategies, increased debt obligation and its
increased international dependence continue to float on the
surface. Nevertheless, good liquidity, exposure to a somewhat
recession-proof sector and cost containment measures will drive
growth in the future.
(Editor's Note: It was earlier stated that Dollar Financial
competes with CapitalSource
Inc. [NYSE: CSE] in the payday lender
industry. We are re-issuing this blog to correct the
mistake.)
MasterCard Gains Wukesong Rights
In an effort to expand its international
business, MasterCard Inc. (NYSE: MA) has obtained
the naming rights of Wukesong Arena in Beijing for a five-year period. Though the
financial terms of the deal were not disclosed, it was decided that
the arena will be re-named the MasterCard Center or Wanshida
Zhongxin in China.
The Wukesong arena, which has a capacity of 18,000 seats, will
become the first 2008 Olympic Games venue in China's sports and entertainment industry to
be re-branded commercially. In addition, Bloomage International
Investment Group will act as the owner of the Wukesong arena,
and Aegon NV (NYSE: AEG) and the U.S. National
Basketball Association (NBA) as consultants to run the arena.
The renaming will become official on January 21, and will combine the local ownership
and know-how with the international event management expertise and
sponsorship, in order to bring the world's best performers to
Beijing.
The popular Cantonese pop singer Jacky
Cheung is scheduled to perform at the launch of MasterCard
Center, along with other renowned artists including the American
rock band the Eagles and Hong Kong
singer Aaron Kwok. Additionally, the
Wukesong arena will host sports events like NBA basketball, table
tennis, badminton and others.
Macy's Sales Up, Fixed on Outlook
Macy's Inc. (NYSE: M) recently posted sales
for the five-week period ended January 1,
2011 that fell short of the analysts' expectation but
reiterated its outlook.
Macy's comparable-store sales for December 2010 rose 3.9%, following an increase of
6.1% registered in November 2010 and
reflecting a sharp improvement from a marginal increase of 1%
witnessed in December 2009.
Management pointed that sales remained robust across Macy's and
Bloomingdale's, despite
unfavorable weather condition. Comparable-store sales for the
holiday selling period (November/December) rose 4.6%.
Cincinnati, Ohio-based company,
Macy's stated that year-to-date comparable-store sales grew by
4.7%.
Macy's said that total sales for December jumped 4.5% to
$4,619 million from $4,422 million in the same month last year.
Year-to-date, sales were up 6.6% to $23,695
million from $22,236 million
in the comparable year-ago period.
Online sales, which
include macys.com and bloomingdales.com, retained
their growth momentum in December and soared 28.4% for the month
under review, and were up 28.8% year-to-date. Macy's is seeking to
expand both the Macy's and Bloomingdale's brands.
Macy's maintained its sales and earnings guidance. The company
continues to expect comparable-store sales for fourth-quarter 2010
between 3.5% and 4.5%. Management hinted at fourth-quarter earnings
in the range of $1.44 to $1.49 per
share, translating into fiscal 2010 earnings of $1.96 to $2.01.
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