EDMONTON, Sept. 17, 2012 /CNW/ - The Cash Store Australia Holdings Inc. ("Cash Store Australia" or the "Company") (TSXV: AUC) today announced results for the three and twelve months ended June 30, 2012.
Cash Store Australia has established a strong presence in Australian small sum short-term loan business over the past five years. In the third quarter of fiscal 2012, the Company underwent significant change to adapt to recent regulations and to prepare for pending regulations expected to come into effect in March 2013.
"Getting aligned with the current and future regulatory requirements was an imperative the Company needed to undergo." CEO Gary Holden said. "These changes included revisions to its loan contracts, strengthening its disclosure polices and tightening its lending criteria. During this transition period, we decided to suspend the issuance of new loans from March 17, 2012 to April 14, 2012 while revisions to internal procedures and IT systems were implemented."
During the quarter, the Company initiated the closure of 10 branch locations that were deemed to be not viable on a go-forward basis. Four more branches are slated for closure by December 2012. This decision, when combined with the suspension of lending and the cessation of providing the insurance product, resulted in a combined revenue reduction and increase in costs of approximately $3.3 million compared to the same quarter last year.
The Company's decision to tighten its lending criteria has had a material impact on the volume of loans issued. This was an expected outcome as the Company continues to work on improving collection rates and reducing retention payments over time. Retention payments increased by $1 million over the same quarter last year.
The reduction in revenue, increase in retention payments and the costs of the branch closures has resulted in the net loss increasing by $4.3 million compared to the same period last year.
"These are challenging times for the Company, but the difficult decisions are behind us now. We have restructured our product offerings, trimmed the number of uneconomic locations, tightened our lending criteria and have begun the process of reducing our operating costs." CEO Gary Holden said. "Lowering the fundamental cost structure, improving our collection rates, introducing new products, increasing our loan volumes by shifting our customer demographic to primarily employed customers and reducing our retention payments will be the primary focus in the coming quarters."
Highlights for the fourth quarter (a table of results can be found at the end of this news release):
- Revenue down 56.3% to $2.1 million, from $4.8 million for the same quarter last year.
- Net loss of ($5.3 million) up from ($697,000) in the fourth quarter of last year.
- Branch operating loss increased to ($3 million) from a positive $331,000 for the same quarter of last year.
- Diluted loss per share of ($0.32) up from ($0.04) in the same quarter last year.
- Negative EBITDA of ($4.8 million) up from ($371,000) in the same quarter last year.
- Non-cash impairment of property and equipment of $302,000 compared to $66,000 for the same quarter last year
Highlights for the year ended June 30, 2012
- Revenue down 1.5% to $15.9 million, from $16.2 million for the same period last year.
- Net loss of ($11.4 million) compared to a loss of ($4.3 million) for the same period last year.
- Branch operating loss increased to ($4.7 million) from ($251,000) for the same period last year.
- Diluted loss per share of ($0.69), compared to a diluted loss per share of ($0.26) for the same period last year.
- Negative EBITDA of ($9.3 million), up from ($3.0 million) in the same period last year.
- Non-cash impairment of property and equipment of $1.3 million compared to $389,000 for the same period last year.
About Cash Store Australia
Cash Store Australia is the only payday advance broker in Australia publicly traded on the TSX Venture Exchange (TSXV:AUC). Cash Store Australia operates 71 payday advance branches in the States of Victoria, Queensland, Tasmania, Northern Territory, and New South Wales Australia under the banner "The Cash Store".
Cash Store Australia acts as a broker to facilitate payday advance services to income-earning consumers who may not be able to obtain them from traditional financial institutions.
Summary Financial Information
|Three Months Ended||Twelve Months Ended|
| Consolidated results
(presented in Canadian dollars)
|| June 30
| June 30
| June 30
| June 30
|No. of branches||71||81||71||81|
|Brokerage||$ 2,028,547||$ 4,272,177||$ 14,445,770||$ 14,777,223|
|Salaries and benefits||2,110,578||2,391,132||9,229,088||8,119,456|
|Selling, general, and administrative||484,525||505,305||2,013,267||1,792,008|
|Advertising and promotion||95,166||78,412||555,189||705,858|
|Depreciation of property and equipment||100,812||181,765||568,518||608,409|
|Branch Operating Income (Loss)||(3,044,964)||330,565||(4,666,465)||(251,253)|
|Other depreciation and amortization||(13,144)||15,474||26,789||58,799|
|Impairment of property and equipment||302,185||66,428||1,272,734||388,832|
|Foreign exchange loss (gain)||6,018||(63,378)||54,088||(298,784)|
|Net loss||$ (5,277,473)||$ (696,560)||$ (11,387,688)||$ (4,286,927)|
| Weighted average number of shares
outstanding - basic
| Basic and Diluted loss per share
|Consolidated Balance Sheet Information|
|Working capital||$ (15,413,954)||$ (5,837,410)||$ (15,413,954)||$ (5,837,410)|
|Total long-term liabilities||142,240||209,661||142,240||209,661|
|Shareholders' equity||$ (14,610,850)||$ (3,264,895)||$ (14,610,850)||$ (3,264,895)|
| * EBITDA - earnings before interest, income taxes, stock-based compensation, depreciation of property and
equipment, amortization of intangible assets and impairment of property and equipment.
Forward Looking Information
This News Release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to our objectives, strategies, operations and financial results. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieve. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Cash Store Australia, to be materially different from those expressed or implied by such forward-looking information. All material assumptions used in making forward-looking statements are based on management's knowledge of current business conditions and expectations of future business conditions and trends. Although we believe the assumptions used to make such statements are reasonable at this time and have attempted to identify in our continuous disclosure documents important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Certain material factors or assumptions are applied by us in making forward-looking statements, include without limitation, factors and assumptions regarding our continued ability to fund our pay day loan business, rates of customer defaults, relationships with, and payments to, third party lenders, demand for our products, as well as our operating cost structure and current consumer protection regulations. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. We do not undertake to update any forward-looking information, except in accordance with applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: The Cash Store Australia Holdings Inc.
For further information:
on Cash Store Australia, please contact:
Gary Holden, Chief Executive Officer
(011) 61 (03) 9802-1566; e-mail: [email protected]
Bill Johnson, Chief Financial Officer
(780) 732-5695; e-mail: [email protected]