CCV - Cash Converters

[bigdog]

ASX announcements - two new substantial shareholders on board

08/10/2013 14:14 Becoming a substantial holder from CBA
-- 5.02% in September 2013 and new shareholder since the 2012 annual report



27/09/2013 16:07 Change in substantial holding from PPT
-- increased to 9.6% in September 2013 and new shareholder since the 2012 annual report




Top 20 shareholders per A N N U A L R E P O R T 2 0 1 2

 

[VSntchr]

Announcement out today...
I think the move down to 90c yesterday will prove to be a good buying point today (I disclose I have added more).

One thing to keep an eye on is the FSA looking into UK lending practices as of April 2014. CCV only had minor issues identified by the OFT which conducted a review of the lending products - these have since been dealt with.

As I have been saying for a very long time - CCV is weathering an industry storm, with only a slowing of growth...while other smaller players are collapsing around them. To me it is a classic case of short term pain for long term gain as they will eventually reap the rewards of a larger customer base with fewer competitors.
The moves by the government which have caused this have not really changed much in the end game for the consumer IMO. I think that given enough time, market forces would have sorted out the cases of over-pricing...
However, now the external force has ensured that this will occur faster and I think it is to CCV's benefit - although their margins may not be as wide due to pricing-caps, they should benefit from a much larger customer base...which has additional benefits through cross-selling, word of mouth etc etc.

This seems to be taking affect already when you look at the charts showing the NUMBERS of new loans in the last few months showing strong growth. In the short term the volumes are not highly correlated to the number of loans due to lower loan values.

Another thing to keep an eye on is the growth of the online lending facility. It grew 90% over FY2013 to now constitute 30% of the total personal loan book. I expect this figure to keep growing, lending can be a sensitive issue and many people are too proud to go in-store. The UK online lending was only launched in July so I'll be watching for growth to follow a similar (albeit I expect slower, us Aussies are ahead of the game when it comes to online IMO) in that market too.

 

[pixel]

Hey VS,

I would've thought that, with conditions becoming tougher for the lower-income families, Cash Converters should prosper a lot more than they apparently do. Bu when I look at the chart, it's more as if THEY were facing the tough times, not their clientele.



Therefore, till my chart shows a break of the falling trend - at least the steepest 3rd gradient - I'll stay away.

 

[abucs]

It's certainly a rollercoaster ride. I'm thinking the company being decades old is a good sign that they can handle short-term problems.

P.S. I like your 'early worm' quote pixel.

 

[Valued]

I am staying away due to the legal action by Maurice Blackburn. They are quite serious about this class action and they believe litigation has a high prospect of success. Normally what happens is CCV will settle for "commercial convenience" and such a settlement will see a profit wipe out. If they do defend, it will defer payment if they lose for some time due to length of litigation. If they do end up losing eventually, they will make a loss that year. They will likely need to put aside cash reserves for that eventuality which means you will see a reduced yield but without any corresponding growth in the business.

Interesting discussion about the morals of it all. I won't invest in cabcharge since I think it's a rip off to consumers and they deserve to be regulated.

 

[littleshire]

Hi all,

this one seems to be falling a fair bit. any ideas how far it will go?

 

[VSntchr]

Hi all,

this one seems to be falling a fair bit. any ideas how far it will go?

Read the thread if you want opinions on CCV. Answering the above question is quite difficult without a crystal ball

 

[Huskar]

One thing to keep an eye on is the FSA looking into UK lending practices as of April 2014. CCV only had minor issues identified by the OFT which conducted a review of the lending products - these have since been dealt with.

I have just got back from the UK where it was quite big news that the government announced a cap on lending rates.

http://www.dailymail.co.uk/news/art...n-huge-rates-fees-George-Osborne-reveals.html

If you want an explanation for the share price falls look no further.

Amazed to see no comment on this released by CCV?? Or am I missing something

 

[JTLP]

Bit of a leaky ship yesterday with an announcement today that CCV have bought in to 25% of a franchise arrangement in NZ.

These guys were steadily going down over the last few months...will see how this plays out.

 

[bigdog]

4/03/2014 Strategic Investment in Joint Venture for South America and Mexico

Cash Converters International Limited (“Cash Converters” or “the Company”) is pleased to announce that it has entered into a Joint Venture with EZCORP Inc to launch Cash Converters in South America and Mexico.

Cash Converters will hold a 20% interest in the Joint Venture through a subsidiary company in return for granting a master licence to the Joint Venture for Latin America and providing information technology services, training and management support. EZCORP, through a subsidiary company, will inject US$3.6 million into the Joint Venture in return for its 80% interest. Any additional funding is subject to mutual agreement with arrangements in place to enable EZCORP to provide extra funding and receive a preferential distribution without diluting the Company’s 20% interest in the Joint Venture.

EZCORP currently owns and operates 244 pawn stores in Mexico, trading as Empeno Facil and has operational headquarters in Miama, Florida. EZCORP has identified that the Cash Converter business model is unique in the Mexican and Latin American markets due to its modern retail offering and multi-channel lending products and considers that these points of difference create an opportunity to grow a substantial business in the region.

Growth Strategy
The Joint Venture will grant a Master Franchisor agreement to suitable local partners for the development and roll out of Cash Converters stores, both by way of owner operated stores and franchised stores throughout Mexico and Latin America.

The Joint Venture will establish a management structure in Mexico and then issue a Master Franchisor licence for Mexico with a local partner. Once established in Mexico the Joint Venture will operate with local partners to target locations in South America. The intention is to open the first Cash Converter store in Mexico this year.

Managing Director Peter Cumins said “This as an exciting opportunity for us to achieve progress in
these territories with minimal capital outlay and with the support of EZCORP who has an established presence in Mexico. We see significant opportunity for the provision of our financial services products and online platforms across the region. Although the Joint Venture is not expected to be a material contributor in the short term we see strong growth potential for us in the region over the next 5 to 10 years”

 

[VSntchr]

Good to see that EZcorp is still keen to collaborate, I just hope they don't try to take over CCV on the cheap again!

 

[VSntchr]

In another Ezcorp related incident, now ex-BOQ CEO has been identified as the new exec chairman. With a bunch of Aussies getting a foothold perhaps the relationship between the two will strengthen further.

from SMH:
NASDAQ-listed payday lender EZCorp has confirmed Bank of Queensland CEO Stuart Grimshaw will become its executive chairman in an Australian-led takeover of the company.
An adviser to the company, fellow Australian Lachlan Given, was appointed non-executive chairman last month. But he will now become executive vice chairman in a coup led by EZCorp’s controlling shareholder, MS Pawn Ltd.
Amid allegations money was being siphoned out of EZCorp, CEO and president Paul Rothamel, chairman William Love and another board member, Joseph Beal, were ousted last month by Australian-born private equity investor Phillip Ean Cohen.
He owns MS Pawn Limited Partnership, which controls EZCorp via its 100 per cent ownership of its class B voting common stock. Another board member, Charles Bauer, resigned.
EZCorp owns a third of Cash Converters and William Love and Joseph Beal are also non-executive directors of the Australian company.

Read more: http://www.smh.com.au/business/mark...nings-rally-20140814-3dnrm.html#ixzz3AKyUEbO0

 

[bigdog]

http://www.wkrb13.com/markets/36756...rating-for-cash-converters-international-ccv/

Hartley’s Research Reaffirms Buy Rating for Cash Converters International (CCV)
Sep 4th, 2014

Cash Converters International (ASX:CCV)‘s stock had its “buy” rating reiterated by stock analysts at Hartley’s Research in a report issued on Thursday. They currently have a $1.27 price target on the stock.

Shares of Cash Converters International (ASX:CCV) opened at 1.150 on Thursday. Cash Converters International has a 52 week low of A$0.750 and a 52 week high of A$1.325. The stock has a 50-day moving average of A$1.13 and a 200-day moving average of A$1.05. The company has a market cap of A$493.2 million and a price-to-earnings ratio of 20.62.

Cash Converters International Limited is engaged ownership and franchising of retail and financial services stores, which operate as retailers of second hand goods and suppliers of financial products.

4600

 

[bigdog]

The market liked todays ASX quarterly update

CCV still is court case in NSW hanging over its head!

CCV $1.095 $+0.095 +9.50% @ Mon 27 Oct 2014 11:03 AM

CCV 27/10/2014 8:27:56 AM Trading Update for QTR Ending 30 Sept 2014
http://www.asx.com.au/asxpdf/20141027/pdf/42t63tz4pccs5t.pdf

Trading Update
Cash Converters International Limited is pleased to provide the following trading and performance update based on the first quarter unaudited management accounts for the 2015 financial year. The normalised EBITDA profit for the quarter ending 30 September 2014 was $16.6 million, up 61% on the corresponding first quarter last year (2013 first quarter: $10.3 million).

This strong result reflects the continuing upward trend in earnings reported at the full year.

Major highlights for the first quarter include:
• Strong revenue growth compared to the previous corresponding period up 26.2% to $97.2 million (2013 first quarter: $77.0 million). The major drivers for revenue growth over the period included an increase in personal loan income of $12.5 million and an increase in corporate store revenue of $6.1 million;

• The personal loan book in Australia grew by 23.4%, from $85.1 million as at 30 September 2013 to $105.0 million as at 30 September 2014;

• The growth of the online personal loan business in Australia continues to be very strong with the value of loans written increasing to $13.1 million for the period, up 111.5% on the previous corresponding period. (2013 first quarter: $6.2 million);

• The value of online cash advance and personal loan products approved in the period increased 112.7% to $15.4 million; and

• The corporate store network in the UK and Australia has seen revenue grow by 15.4% to $45.9 million over the corresponding period. The corporate store network EBITDA was $4.7 million for the quarter, representing an increase of 148.7% on the corresponding period. (2013 first quarter: $1.9 million).

Financial services operations
During the first quarter we have continued to experience an increase in the amount of loans advanced for the personal loan product. As at 30 September the personal loan book was $105 million, an increase of 23.4% on the same period last year ($85.1 million as at 30 September 2013).

The personal loan book traditionally falls away slightly in the first quarter from the closing loan book as at 30 June. This seasonal trend continued with the loan book down slightly from 30 June 2014 closing balance of $109.2 million, though representing a notably smaller 3.8% decrease, which is less than we have historically experienced (pcp was down 7%). Bad debt percentage levels have increased slightly to 7.2% from 6.6% as at the 30 June 2014 which is within the historical range for the business. . We expect the loan book growth momentum to continue into the Christmas period
which is a seasonally strong period for Cash Converters.

Company owned store results
The corporate store network in Australia produced a first quarter EBITDA of $4.7 million, up 148.7% on the previous period (2013 first quarter: $1.9 million). For existing stores, a number of important KPI’s improved against the corresponding period - pawn broking interest (up 16%), cash advance commission (up 19%), personal loan commission (up 13% with online up 51%) and retail sales up 2%. Recently acquired stores delivered an additional $695K of EBITDA.

In the quarter ending 30 June 2014 the Company acquired three franchised stores in Queensland. These acquisitions take the number of corporate stores in Australia to 64. The acquisition price of $5.2 million for these latest three stores represents an EBIT multiple of 3.9 times on earnings and a multiple of 2.9 times excluding assets.

The corporate store network of 58 stores in the UK produced an EBITDA loss of $121,406, compared to previous corresponding profit of $301,466.

5346

 

[bigdog]

http://www.theaustralian.com.au/bus...-licences-stores/story-fnjw8txa-1227135542203

Cash Converters to raise $45m to buy licences, stores

Maggie Lu Yueyang
Business Spectator
November 26, 2014 12:47PM


PAWNBROKING franchisor Cash Converters will raise up to $45 million through a placement to fund the acquisition of development agent licences and potential store purchases.

The Perth-based company (CCV) has engaged Hartleys Ltd as sole lead manager for the placement, in which it will issue up to 47.4 million new shares at $0.95 each.

The issue price represents an 8.7 per cent discount to Cash Converters’ last close of $1.04 per share.

It is understood that Cash Converters will use part of the proceeds to buy licences from Kentsleigh and Cliffview, which own the right to manage financial services in Australia and receive commissions on loans. The transaction, worth $30.8m, will end the ongoing obligations for Cash Converters to pay them commissions.

Another $12m will be used to fund potential store acquisitions.

The placement has won support from Cash Converters’ majority holder EZCORP, an American pawn shop. EZCORP has said it intends to participate in the placement to maintain its current 33.8 per cent holding.

Hartleys Ltd acts as the sole lead manager on the placement.

Shares in Cash Converters are in a trading halt, until the company makes an announcement.

5991

 

[bigdog]

CCV $1.000 $-0.040 -3.85% at close today


http://www.fool.com.au/2014/11/27/c...etail-investors-with-institutional-placement/

Cash Converters International Ltd scorns retail investors with institutional placement
By Owen Raskiewicz - November 27, 2014

Around midday today, pawn broker and payday loans provider Cash Converters International Ltd (ASX: CCV) emerged from a week-long trading halt.

The good news from Cash Converters’ announcement today was the decision to terminate an open-ended licence with two “Development Agents”, named Cliffview Pty Ltd and Kentsleigh Pty Ltd.

The licence with the two development agents has been in place for 10 years and allows them to receive a commission for every loan the company writes. Over the years, Cashies’ loan book has grown exponentially.

By terminating the licence, the company will save approximately $5.7 million per year.

However the cost of termination is $30.8 million and will have an after tax impact of negative $18.8 million (including GST savings and the reduction in expenses).

Putting it in your left pocket

The bad news from today’s announcement is Cash Converters chose to do an institutional capital raising of $45 million through the placement of 47.4 million shares at $0.95 each.

At June 30 2014 Cash Converters had around 428.9 million diluted shares on issue and a market price of $1.04 prior to the placement. That means total shares on issue will increase by 11%, at a 9% discount.

Now, I’m well aware it costs less in time and money to issue the shares to institutions and sophisticated investors, rather than to retail holders.

But is it fair? Did the deal have to be done so quickly?

After all, only $30.8 million of the total $45 million is going towards the licence termination, the rest will be working capital and funds for acquisitions.

So couldn’t the remaining portion have included a retail offer?

According to its latest Annual Report, Cash Converters had 7,729 shareholders. At the time of writing, Cash Converters shares are down 3.4%.

Foolish takeaway

I’m a big fan of Cash Converters as an investment (if you didn’t already guess it, I’m a shareholder) but today’s decision is yet another case of retail shareholders getting scorned. Conducting a pro-rata renounceable rights issue is both a shareholder friendly and better way to raise money in my opinion.

In summary, today’s announcement demonstrates a great use of funds but unfair way to go about raising capital.

6159

 

[skc]

Not a great period for CCV.

First there is regulatory review. Then came a class action. And today, confirmed rumour that Wespac has pulled out of financing payday lenders.

MNY also taking a nice hit.

Will someone else step up to fund them? The existing contract with WBC doesn't run out until Mar 2016, so there's a chance that the regulatory issue will be bedded down and they will find a replacement.

Wild share price action today (which I totally fk'd it up :bad.

 

[VSntchr]

Not a great period for CCV.

First there is regulatory review. Then came a class action. And today, confirmed rumour that Wespac has pulled out of financing payday lenders.

MNY also taking a nice hit.

Will someone else step up to fund them? The existing contract with WBC doesn't run out until Mar 2016, so there's a chance that the regulatory issue will be bedded down and they will find a replacement.

Wild share price action today (which I totally fk'd it up :bad.

What did you do with it SKC?
It was a bit surprising to see so many knife catchers around to keep it above 50c IMO. The sell side got pretty thin at times (well, CCV isn't thick at the best of times anyway). Will be interesting to see how it goes tomorrow and if there are any more lines left for the bargain hunters.
I guess that some of the more informed punters did some of their selling yesterday as the rumours were around...so perhaps today's action reflected the fact that it was semi-priced. Although I personally think this could experience selling for a while longer..

 

[skc]

What did you do with it SKC?

Let's see.

MNY annonuced that WBC has pulled the finance, confirming the rumour from 2 days ago. I went short yesterday but size was too small. Mistake #1.

I covered half of my short on lifting of the trading halt, when it didn't look like there were a lot of sellers. Mistake #2.

I covered and went long 2 minutes after re-open when 50c looked like supported. This in itself wasn't a mistake but I chased it a bit and didn't exit fast enough when it went back down towards 50c. Mistake #3.

It plunged all the way back to 46c then broke 50c again on the way back up. I traded it long again but only 1/2 size as my first long. I sold half of my small long @ 52 and rest @ 54.5. So sold too early. Mistake #4.

Overall... there was 10c range on a 50c stock and I traded it like a dog's breakfast when there's plenty to be made.

Fail.

It was a bit surprising to see so many knife catchers around to keep it above 50c IMO. The sell side got pretty thin at times (well, CCV isn't thick at the best of times anyway). Will be interesting to see how it goes tomorrow and if there are any more lines left for the bargain hunters.
I guess that some of the more informed punters did some of their selling yesterday as the rumours were around...so perhaps today's action reflected the fact that it was semi-priced. Although I personally think this could experience selling for a while longer..

 

[notting]

Overall... there was 10c range on a 50c stock and ............. when there's plenty to be made.

Don't worry. There is always tomorrow!