Carfinco Announces Record Year End Results

TSX: CFN

EDMONTON, March 18, 2013 /CNW/ - Carfinco Financial Group Inc. ("Carfinco" or the "Company") announces financial results for the fourth quarter and year ended December 31, 2012.

2012 was another strong year for Carfinco. Net earnings for 2012 were $20.6 million, an increase of $3.5 million from $17.1 million for 2011.  The change in net earnings is mainly due to the increase in the finance receivables balance of $32.4 million in 2012 versus an increase of $25.2 million in 2011. Carfinco achieved its growth objectives with finance receivables increasing 21.5% during the year.

Return on shareholders' equity for 2012 was 52.2%, compared to return on fund unit equity of 55.5% in 2011.

HIGHLIGHTS

  • Earnings per share for 2012 of 84 cents;
  • Dividends to shareholders of 47 cents per share during 2012;
  • Return on shareholder's equity for the year of 52.2%;
  • Record loan originations of $149.6 million for 2012;
  • Record principal balance of finance receivables at the end of 2012 of $201.5 million;
  • 31+ day delinquent accounts for the fourth quarter of 2012 were 3.2%.

Revenues of $71.8 million for 2012, increased 20.5% from the revenues of $59.6 million for 2011.  Revenues of $19.2 million for the fourth quarter of 2012 represent an increase of 5.3% from the $18.2 million for the third quarter of 2012 and a 16.1% increase from the $16.5 million for the fourth quarter of 2011.

Loan originations for 2012 were $149.6 million, a 28.6% increase from $116.3 million in 2011.  Loan originations of $40.1 million for the fourth quarter of 2012 was a 0.8% decrease from the $40.4 million in loan originations for the third quarter of 2012 and an increase of 24.4% from the $32.2 million in the fourth quarter of 2011.

Finance receivables at the end of 2012 were $182.8 million, an increase of 21.5% from $150.5 million for 2011.

For the fourth quarter of 2012 earnings were $5.0 million, versus $5.6 million in the third quarter of 2012 and $4.4 million in the fourth quarter of 2011.  Loan originations remained steady at $40.1 million in the fourth quarter, with the decline in vehicles being financed during the holiday season, versus $40.4 million in the third quarter. The annualized loss rate on the finance receivables increased 2.3% from 12.8% to 15.1% during the fourth quarter. Management continues to evaluate loan losses on a geographical basis and program level and has implemented modifications to our credit and collection policies where required.

31+ days delinquent accounts for the fourth quarter of 2012 were 3.2% versus 2.7% for the third quarter of 2012 and 2.9% for the fourth quarter of 2011.

On January 1, 2012, Carfinco Income Fund converted from an income fund to a public corporation with the name changed to Carfinco Financial Group Inc.  The shares were listed on the TSX on January 3, 2012 under the symbol "CFN."

During 2012, Carfinco distributed $11.6 million to shareholders, or 47 cents per share, this represents 51.5% of distributable cash. Carfinco continues to maintain a dividend to its shareholders, currently set at 4.0 cents per share per month.

Management continues to target growth of the finance receivables while focusing on maintaining acceptable levels of delinquencies and credit losses.

About Carfinco Financial Group Inc.

Carfinco focuses on providing consumer vehicle loans to borrowers unable to obtain financing through traditional lending sources.  A network of select independent and franchise dealerships offer Carfinco's payment plan to their customers who must, along with the vehicle, meet Carfinco's underwriting guidelines. The shares of the company trade on The Toronto Stock Exchange under the symbol "CFN".

Caution Regarding Forward-Looking Statements - This news release contains certain forward-looking statements, including statements regarding the business and anticipated financial performance of the company.  These statements are subject to a number of risks and uncertainties.  Actual results may differ materially from results contemplated by the forward-looking statements.  When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and should not place undue reliance on such forward-looking statements.

Selected Annual Information and Key Financial Ratios 

($000's for stated value, except percentages, shares (fund units) outstanding and per share (fund unit) amounts)

    December 31, 2012   December 31, 2011
         
Total revenue  $ 71,809 $ 59,584
Net earnings and comprehensive income  $ 20,591 $ 17,122
Normalized earnings before taxes  $ 27,883 $ 23,335
Earnings per share (fund unit) - basic and diluted  $ 0.84 $ 0.70
Loan originations  $ 149,613 $ 116,322
Shareholders' equity (Unitholders' equity)  $ 43,968 $ 34,960
Shares (fund units) outstanding     24,645,230   24,645,230
Book value per share (fund unit)  $ 1.78 $ 1.42
Dividends per share (fund unit)  $ 0.470 $ 0.360
Financial leverage ratio     2.97:1   3.15:1
Return on shareholders' equity (unitholders' equity)     52.2%   55.5%
Average portfolio yield     43.1%   43.2%
Annualized loss rate     12.9%   12.9%
Return on portfolio assets     12.4%   12.4%
Pre-tax return on portfolio assets     16.6%   16.8%
Average cost of borrowing     5.2%   5.2%
Operating and other expense ratio on portfolio assets     8.6%   8.9%


Consolidated Statements of Financial Position          
              December 31,   December 31,
              2012   2011
                   
Assets                
Finance receivable       $ 182,842,663 $ 150,463,909
  Allowance for credit losses       (9,250,000)   (7,150,000)
Finance receivables - net         173,592,663   143,313,909
                   
Cash           459,498   937,994
Inventories           313,014   239,453
Other assets           1,172,998   1,167,268
Equipment           550,261   344,736
Deferred tax assets         453,340   264,702
              2,949,111   2,954,153
            $ 176,541,774 $ 146,268,062
                   
Liabilities                
Bank credit facility       $ 126,787,937 $ 102,675,941
Accounts payable and accrued liabilities     697,672   1,205,892
Taxes payable           2,363,670   5,106,667
Deferred dealer obligation         2,076,396   2,068,762
Interest rate swaps         484,665   250,317
Deferred lease inducement         163,590   -
              132,573,930   111,307,579
                   
Shareholders' / Unitholders' Equity            
Share capital           35,119,425   -
Fund unit equity         -   35,119,425
Retained earnings (deficit)         8,848,419   (158,942)
              43,967,844   34,960,483
            $ 176,541,774 $ 146,268,062

 


Consolidated Statements of Earnings, and Comprehensive Income        
           
      December 31,   December 31,
For the years ended   2012   2011
           
Financial revenue        
  Interest revenue $ 66,193,874 $ 55,663,538
  Fee and servicing income   5,614,878   3,920,297
  Total revenue   71,808,752   59,583,835
           
Financial expenses        
  Interest expense   5,917,276   5,052,664
  Provision for credit losses   23,651,197   19,486,096
  Loss (gain) on interest rate swaps   234,348   (298,279)
  Total financial expense   29,802,821   24,240,481
Net financial income before operating and other expenses and taxes   42,005,931   35,343,354
           
Operating and other expenses        
  General and administrative   14,182,284   11,506,221
  Depreciation of equipment   175,451   203,954
  Conversion costs   35,789   652,845
  Gain on unit based payment obligation   -   (143,604)
  Total operating and other expenses   14,393,524   12,219,416
           
Earnings before taxes   27,612,407   23,123,938
           
Taxes        
  Current   7,210,426   5,106,667
  Deferred (recovery)   (188,638)   895,651
  Total taxes   7,021,788   6,002,318
           
Net earnings and comprehensive income $ 20,590,619 $ 17,121,620
           
Earnings per share / fund unit        
  Basic and diluted $ 0.84 $ 0.70

 

Consolidated Statements of Changes in Equity
              Retained     
              earnings    
      Fund unit equity   Share capital   (deficit)   Total
                   
Balance, January 1, 2011 $ 35,119,425 $ - $ (8,416,613) $ 26,702,812
  Net earnings   -   -   17,121,620   17,121,620
  Cash distributions on fund unit equity   -   -   (8,863,949)   (8,863,949)
Balance, December 31, 2011   35,119,425   -   (158,942)   34,960,483
  Conversion under plan of                 
    arrangement    (35,119,425)   35,119,425   -   -
  Net earnings   -   -   20,590,619   20,590,619
  Cash dividends on shares   -   -     (11,583,258)     (11,583,258)
Balance, December 31, 2012 $ - $ 35,119,425 $ 8,848,419 $ 43,967,844

 


Consolidated Statements of Cash Flows
                   
              December 31,   December 31,
For the years ended     2012   2011
                   
Increase (decrease) in cash              
                   
Operating activities                
  Net earnings       $ 20,590,619 $ 17,121,620
  Non-cash items included in net earnings     (29,193,814)   (25,360,389)
  Changes in operating assets and liabilities     (34,327,000)   (26,164,461)
  Interest received         46,147,154   38,989,139
  Interest paid         (5,729,732)   (4,887,279)
  Income taxes paid         (9,953,422)   -
Net cash used in operating activities       (12,466,195)   (301,370)
                   
Investing activities                
  Purchase of equipment       (380,976)   (196,283)
Net cash used in investing activities       (380,976)   (196,283)
                   
Financing activities                
  Advances on bank credit facility       32,290,954   14,956,601
  Repayments on bank credit facility     (8,050,000)   (5,400,000)
  Deferred transaction costs       (289,021)   (163,293)
  Cash dividends to shareholders       (11,583,258)   -
  Fund unit cash distributions       -   (8,863,949)
  Proceeds on exercise of fund unit options     -   66,668
Net cash provided by financing activities       12,368,675   596,027
                   
Net (decrease) increase in cash         (478,496)   98,374
Cash, beginning of year         937,994   839,620
Cash, end of year         $ 459,498 $ 937,994

 


 

SOURCE: Carfinco Financial Group Inc.

For further information:

Mr. Tracy A. Graf
CEO & Director of Carfinco Financial Group Inc.
Telephone: 1-888-486-4356
Facsimile: 1-888-486-7456
E-mail: tracy.graf@carfinco.com
Web site: www.carfinco.com

The Howard Group Inc.
Jeff Walker
Investor Relations
Telephone: 1-888-221-0915
E-mail: Info@howardgroupinc.com
Web site:  www.howardgroupinc.com

Profil de l'entreprise

Carfinco Financial Group Inc.

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