# COG - COG Financial Services



## Joe Blow (1 June 2010)

Wallace Absolute Return Limited (WAB) is an investment company. The investments for the Company predominately comprises members of the S&P/ASX 200 Index, bills of exchange, other negotiable investments, debentures and other permitted investments.

http://www.wallaceabsolutereturn.com.au


----------



## System (21 April 2017)

On April 21st, 2017, Armidale Investment Corporation Limited (AIK) changed its name and ASX code to Consolidated Operations Group Limited (COG).


----------



## Miner (20 August 2019)

NSC invested more than 22% on COG. This company also rumoured to have a strategic move on loan issue in 2020.
Any one has done research on this company ?
From free website of motley fool (April 2019)  it says :
" For readers unfamiliar with this one, it’s a financing and leasing business. Naos pointed to the fact that COG has received a number of informal and preliminary enquiries as a reason why COG’s momentum is one to keep an eye on.

The potential for COG to launch a white-label finance product that is funded or partnered with a big four bank for prime auto loans is also exciting, according to Naos.

Anything in the loan space is a very interesting opportunity at the moment. Whilst the royal commission is causing banks to be much more cautious about lending these days, the slowing Australian economy could mean a rise of loans going bad." 
DNH


----------



## barney (21 August 2019)

Miner said:


> Any one has done research on this company ?




Know nothing about this one Miner, but the Chart is very unhappy at the moment 

I have trouble making sense of Fundamentals to be honest … yesterdays 2019FY results look pretty good to me  yet the Stock has been trending down heavily.  There are a lot of shares on issue but not a lot of trading Volume.

Technically, it had a peek under the long dated lows late last week  … If it slips back under that low 8 cent area, it could be a slippery slope 

Fundamentally to my untrained eye, it looks like it should be doing the opposite.  Perhaps someone versed in reading balance sheets could shed some light on why it is failing


----------



## Miner (21 August 2019)

barney said:


> Know nothing about this one Miner, but the Chart is very unhappy at the moment
> 
> I have trouble making sense of Fundamentals to be honest … yesterdays 2019FY results look pretty good to me  yet the Stock has been trending down heavily.  There are a lot of shares on issue but not a lot of trading Volume.
> 
> ...



Thanks Barney for your analysis


----------



## Dona Ferentes (9 July 2020)

was trundling along, then it fell off the Covid cliff.

Naos (NCC) think the rebuild has begun:
_"After withdrawing guidance in late March and announcing a significant reduction in business activities for their leasing business, COG updated the market on the financial expectations for their Finance Broker & Aggregation segment (FB&A). This division is expected to earn an EBITDA after non-controlling interests of approximately $10.50 million. We believe this highlights the resilient nature of finance brokers as FY20 EBITDA should only be down ~7.50% compared to FY19, even with the significant disruption that has occurred due to COVID-19. We would also expect that close to 100% of the after-tax earnings from this business will flow through to free cash due to low working capital requirements and minimal capex spend. _

_"COG also announced that they have entered into an agreement to increase their shareholding in Westlawn Finance Group to 75%. We believe that this is a highly strategic acquisition as Westlawn is a well-regarded brand in the mid-north coast region, which has enabled their debenture offering to maintain a size of $200 million even in these times of significant market volatility." _

_




_


----------



## Garpal Gumnut (9 July 2020)

How many names has this little doggie had?

gg


----------



## Miner (9 July 2020)

Interestingly I have been looking into COG once got an update from NCC reports. The volume is rather low for COG and prices have been going north for last few days. Could this investment be lucky duck for NCC as well ? Do not hold


----------



## Dona Ferentes (13 October 2020)

and now NCC spins a comparison, with Plenti PLT on the boards


> Continuing the theme of board renewal, COG announced the appointment of Peter Rollason as an Independent Director. Peter was formerly the CFO of Liberty Financial as well as a former Partner of Deloitte Australia within their M&A advisory division. We believe Peter is an ideal Director to assist with the growth of Westlawn Finance of which COG has now moved to a majority ownership position.





> Interestingly, as a rough comparison, Plenti (ASX: PLT) listed in October with a market capitalisation of $200 million. Although PLT provides loans to a more consumer focused target market than COG, they fund their loans through a managed funds model, which COG now have access to following the Westlawn acquisition. PLT is still loss making, whereas Westlawn has a $240 million debenture book and has historically made $4-$6 million NPBT and was acquired by COG for an implied value of $38 million, of which $14 million consists of regulatory capital on the Westlawn balance sheet.




--- _and, growth?_


----------



## System (18 November 2020)

On November 18th, 2020, Consolidated Operations Group Limited changed its name to COG Financial Services Limited.


----------



## Dona Ferentes (26 August 2021)

> _COG continues to deliver on the strategy it set out several years ago.  COG owns the largest finance broker network in Australia, helping Australian small to medium enterprises (SME) access almost $7bn of finance to fund their businesses each year. Whilst the company is already an important part of the $40bn small business finance sector, we believe there is significant runway for the company to grow both organically and via acquisition, to become a “one-stop shop” for the finance needs of its customers.  _






> _Critical to the success of the COG business model is the relationships that its brokers have with their SME clients.  As the company increases its scale and the products it can supply its clients, we believe it can generate profits to easily support a share price north of $2.  As an integral conduit between large pools of capital and a fragmented base of small businesses, the strategic importance of COG should not be underestimated.  If the market does not recognise the value inherent in the company, we believe a strategic acquirer will._




from Sandon Capital (SNC), an activist value investor.


----------



## Dona Ferentes (9 March 2022)

> _COG Financial Services (ASX: COG) announced a capital light acquisition that we believe should increase NPATA by approximately +10% on an annualised basis, as well as signing a term sheet for an inaugural acquisition debt facility of $31 million. The 1H FY22 result was pre-released with the previous months trading update, which saw adjusted EPS increase by ~+16%. Pleasingly COG also declared a record $0.035 fully franked interim dividend. The COG share price finished flat for the month. _



_- from Naos Asset Mgmt (NCC and NSC hold it)

acquisition being funded by a $31 finance facility :_
Westlawn Finance Limited (a 75% owned subsidiary of COG) has agreed to acquire 100% of the issued capital of Equity-One Mortgage Fund Limited a funds management business based in Melbourne. Equity–One Mortgage Fund Limited operates a contributory mortgage scheme (peer to peer) and has approximately $350 million of funds under management. 



> _From the CEO : "This is a highly EPS accretive transaction using a portion of the surplus cash on Westlawn’s balance sheet.  In addition, Westlawn will provide growth pathways for Equity-One Mortgage Fund Limited  through the utilisation of its existing branch distribution network"_


----------



## Dona Ferentes (15 June 2022)

_Our Business
Asset Finance Broker and Aggregator_​
Seemed to be trundling along, recovered from the Covid days and even put on some gains when Westlawn acquisition announced. Then today, a *Presentation including FY22 forecast* numbers, and down more than 10%, though there has been some bouncback. Probably because the growth isn't there as much as expected, and some player bailed?


----------



## Garpal Gumnut (15 June 2022)

Dona Ferentes said:


> _Our Business
> Asset Finance Broker and Aggregator_​
> Seemed to be trundling along, recovered from the Covid days and even put on some gains when Westlawn acquisition announced. Then today, a *Presentation including FY22 forecast* numbers, and down more than 10%, though there has been some bouncback. Probably because the growth isn't there as much as expected, and some player bailed?



Do mortgage brokers and aggregators make money with rising interest rates as well as falling rates. 

Or is that not a significant determinant?

gg


----------



## Dona Ferentes (15 June 2022)

Garpal Gumnut said:


> Do mortgage brokers and aggregators make money with rising interest rates as well as falling rates.



The amount of business would be the major determinant, and that would be the function of a healthy economy 

_COG is chasing the Asset Finance sector, not mortgages._


> SME customers: transport, engineering, construction, heavy industry customers



Their narrative is that 

Brokers own the relationship with the borrowers – this is critical/most valuable
Aggregators are the bridge between brokers and banks optimising transaction volumes
The trend as seen in mortgage lending (30% from banks/ 70% through brokers) is set to be replicated with Assets of SMEs


----------



## Dona Ferentes (12 July 2022)

_Some comment from NCC:_
COG provided FY22 NPATA guidance of between $22.4 - $23.9 million, a significant increase on the $17.7 million NPATA profit achieved in FY21 (on an underlying basis). What we found of more interest was the detail around the composition of this NPATA, with 35% derived from COG owned finance brokers, 26% via the aggregation network and 9% and 6% from funds management activities and insurance broking respectively. The balance is made up of lending, the stake in Earlypay (ASX: EPY) and head office costs. This granular information has not been released previously and highlights that 75% of COG earnings are derived from capital light earnings streams and are somewhat repeatable in nature. The insurance broking and funds management earnings streams are still very much in their infancy, but in the case of insurance broking, management have previously stated this has the potential to be ~50% of the NPATA derived from finance broking.


----------

