The company’s net profit after tax was increased by $200,000 to $9.36 million on H217, exceeding guidance by 2.2 per cent, but was down 18.3 per cent on the PCP.
A 15.5 per cent decline in earnings from Personal Finance, CCV’s largest division, drove the result, while strong growth in the UK was offset by stagnant store trading in Australia.
Revenue decreased by 12.6 per cent on the PCP to $122.9 million, while earnings before interest, tax, depreciation and amortisation (EBITDA) was up 6 per cent on the last-half to $36.6 million, but down 7.5 per cent on the PCP.
Despite a decline from the prior year, personal finances recorded growth in small-amount (SACC) and medium-amount (MACC) loans during the half.
The SACC loan book recovered from softness in the first quarter, with growth over the holidays delivering a 13.8 per cent increase in the first-half to $77.4 million.
MACC loans increased by 125 per cent to $30.1 million on strong second-quarter growth.
Performance in the personal finance division has driven an optimistic take on the result from management, who said on Monday morning that they anticipate stronger profit growth in the second half than the first.
“[The result] shows the early signs that the transition of Cash Converters to deliver long-term sustainable growth is working,” CEO Mark Reid said.
“The significant expansion in the total loan book supports this and provides a leading indicator for anticipated revenue growth in the second half.”
Company-owned stores delivered EBITDA growth of 2.4 per cent to $8.2 million compared to 2H17 but was down 14.2 per cent on the PCP. Online retail sales increased by 7.3 per cent over the PCP.
Franchise operations, which include those in the UK, offset stagnant growth from company-owned stores in Australia, booking a 14.2 per cent increase in EBITDA over the PCP to $5.8 million.
UK operations themselves recorded EBITDA growth of 40 per cent to $1.4 million over the PCP.
“We will continue to invest in our brand, new products and technology to ensure that the trajectory of performance is maintained. With some significant milestones in the online offering scheduled for delivery in the next quarter, we have the opportunity to further surpass our customers’ expectations and deliver increased revenue and profit for the second half of the year,” Reid said.
Cash converters now has 69 corporate stores and 83 franchised stores in Australia, 195 franchised stores in the UK, and 350 franchised stores worldwide in 15 countries.
CCV’s share price fell by 2.6 per cent to 36 cents in early Monday trading.
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