For personal use only. FSA Group Interim Results Six month period ending 31 December 2010 February 2011

Transcription

1 Interim Results Six month period ending 31 December 2010 February 2011

2 Client acquisition Direct client acquisition model Clients are micro-managed efficiently Via advertising and marketing TV, web etc. Controlled, selective, low cost No third party referral channels Assess client needs Tailor solutions - affordable, sustainable and viable Proactively manage for debt repayment and rehabilitation 2

3 Overview of products and services Individuals Small Businesses Debt Agreements Personal Insolvency Agreements Bankruptcy Other solutions 3

4 Services Debt Agreements Largest provider FY2010 market share 51% Micro manages over $260m of unsecured debt on behalf of creditors under debt agreements Fee for service income Personal Insolvency Agreements and Bankruptcy Debt Agreements Personal Insolvency Agreements Bankruptcy Other solutions One of the largest registered trustees in Australia Fee for service income 4

5 Home loan broking, lending & management 2003 Largest non conforming broker in Australia Up front and trail commission No balance sheet or funding risk 2007 Current $235m non recourse facility from Westpac for non conforming lending Lender s margin and annuity income Balance sheet risk limited to equity invested 2010 Home Loan Broking Home Loan Lending Home Loan Management Prime home loan manager for Bendigo and Adelaide Bank Up front and manager trail commission No balance sheet or funding risk 5

6 Consulting and factoring finance Small Businesses Consulting Provides a range of debt solutions to small businesses Factoring Finance Current $25m limited recourse facility from Westpac for the provision of factoring finance Assigned receivables are credit insured Lender s margin and annuity income 6

7 Interim Results and Operating Performance 7

8 Services Services client numbers 1HFY2010 vs. 1HFY2011 Debt Agreements Up 10% Personal Insolvency Agreements and Bankruptcy Up 16% Continued high levels of consumer debt coupled with a higher interest rate environment are likely to drive demand for debt agreements, personal insolvency agreements and bankruptcy. Debt agreement market is competitive and there is continued pressure on fees from clients, creditors and competitors. 8

9 Home loan lending FSA is one of the few remaining non conforming lenders operating in the market Funding $235m from Westpac Renewed to October 2012 Balance sheet risk limited to equity invested High quality demand due to fewer competitors Currently lending to < 50% of potential clients Aiming to grow loan pool to $600m by 2013 Home Loan Lending Loan Pool Size $220m Security Type 1 st Mortgage Average Loan Size $203,000 Average Weighted LVR 68% % Full Doc Borrowers 98% % Variable Rate Borrowers 100% Geographical Spread Australia Wide >30 day arrears* 2.85% Loss of Capital since inception $132,000 Target Loan Pool 2013 $600m *Competitors >30 day arrears as reported by the Standard & Poors Index was 11.93% at November

10 Factoring finance FSA also provides a range of debt solutions to small businesses including factoring finance Funding $25m from Westpac Renewed to June 2012 High quality demand due to difficulties with small businesses obtaining credit Assigned receivables are credit insured Aiming to grow pool to $20m 25m by 2011 and to $45m by 2013 Factoring Finance Loan Pool Size $16m Security Type Assigned Receivables Average Loan Size $220,000 Average Weighted LVR Ranges 55% 65% % Variable Rate Borrowers 100% Geographical Spread Australia Wide > 90 day arrears 4% Asset Insured Yes Loss of Capital since inception NIL Target Loan Pool 2011 $20m 25m Target Loan Pool 2013 $45m 10

11 Interim Results Revenue and Profit 1H FY2010 1H FY2011 % Revenue and Income $24.70m $27.28m 10.5% Profit Before Tax Services $4.32m $4.36m 0.9% Home Loan Lending $1.60m $1.72m 7.5% Business Services & Lending $0.21m $1.12m 433% Other ($0.07m) ($0.10m) Profit Before Tax $6.06m $7.10m 17.2% Profit After Tax $3.56m $3.97m 11.7% 1. Business Services & Lending = Predominantly Factoring Finance 2. Profit After Tax = Profit After Tax Attributable to Members 11

12 Interim Results Operating Cash flow Cash Flows from Operating Activities FY months FY months 1HFY months Cash Flow from Operations $1.06m $5.26m $3.47m Number of debt agreements under management 7,180 11,050 12,800 Cash flow continues to build 1HFY2011 includes a pre payment outflow of $379,847 for advertising and marketing During 1HFY2011 the total number of clients administered under debt agreements increased to 12,800. Each debt agreement client pays an average fee to FSA of around $100 per month for 4.5 years. FSA forecasts that client numbers will grow to around 17,500 by the end of FY2012. The costs of administering these additional clients will be negligible and therefore we will continue to see a steady and sustained increase in operating cash flow. 12

13 Interim Results Net Operating Cash Flow Cash Flows from Operating Activities FY months FY months 1HFY months Cash Flow from Operations $1.06m $5.26m $3.47m Net cash receipts/(payments) for institutional creditor distributions* $1.42m ($2.13m) ($0.31m) Cash flow continues to build Income taxes (paid) refunded $0.40m ($0.67m) ($0.37m) Net Cash Flows Provided by Operating Activities $2.88m $2.46m $2.78m *FSA will continue to record cash outflows of net cash payments for institutional creditor distributions over the next three years. This cash outflow relates to monies received on behalf of and paid to creditors for debt agreements (DA s) under the pre July 2007 legislation whatever FSA receives it ultimately pays to creditors. The last year this line item should appear is 2013 as DA s under the pre July 2007 legislation should have been finalised. As at 31 December 2010, FSA has an accrual of $2.4m to be paid to creditors so the maximum cumulative Net Cash Payments will be $2.4m over this period. For all debt agreements administered post July 2007, monies are banked into a separate trust bank account, which is not part of the consolidated group. 13

14 Outlook and FY2011 Profit Guidance 14

15 Outlook: growth across all divisions Growth in: Driven by: Services Continuing high levels of consumer debt Home Loan Lending Fewer competitors, stricter bank lending criteria Factoring Finance Home Loan Management Difficulties for small businesses obtaining credit Expansion into the prime home loan market 15

16 FY2011 Profit guidance unchanged FY2010 Actual FY2011 Guidance % Change Loan Pool Average (Closing) Services $8.6m $8.5 $10.5m Home Loan Lending $3.4m $4.0m $225m ($240m) Business Services & Lending $0.9m $2.5m $16.5m ($20m) Profit Before Tax $12.9m $15 $17m Profit After Tax $7.5m $8.6 $10m 15% 33% NTA per share 29.9c c EPS basic 5.82c c 7% 24% 1. Business Services & Lending = Predominantly Factoring Finance 2. Profit After Tax = Profit After Tax Attributable to Members 16

17 PBT before minorities : Annuity contribution growing Fee for service Lending PBT CAGR = 50% Guidance PBT before minorities 17

18 Investor relations contacts Mr. Tim Odillo Maher Executive Director Ms. Jeannene O Day Consultant Limited Lyon Group Pty Limited Level 3, 70 Phillip Street Level 1, 175 Macquarie Street Sydney NSW 2000 Sydney NSW 2000 T: T: F: F: E: [email protected] E: [email protected] Further information can be accessed from fsagroup.com.au 18

19 Disclaimer This presentation is designed to provide a general overview of the activities and financial position of Limited. The material set out in the presentation is current as at the date of this presentation. It is information in summary form and does not purport to be complete. This presentation includes forward looking statements about estimates and outcomes which may be affected by internal and external factors and involve known and unknown risks which may cause actual results and business performance to differ from those expressed or implied in such statements. No assurance or guarantee is, or should be taken to be, given in relation to the future business performance or the likelihood that the assumptions, estimates or outcomes will be achieved. Whilst management has taken every effort to ensure the accuracy of the material in this presentation, it is provided for information only. Limited, its officers and management exclude and disclaim any liability in respect of anything done in reliance on this presentation. It is not intended that the material in this presentation be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered with or without professional advice, when deciding if an investment is appropriate. 19

20 Interim Results Six month period ending 31 December 2010 February 2011