30 June 2013 Interim Results Announcement

30 June 2013 Interim Results Announcement


Key highlights for the six months ended 30 June 2013:

  • Earnings improve significantly with NPAT of $0.7m, ahead of guidance – up $2.2m on the previous corresponding period, reflecting good progress across all divisions.
  • Strong results from the UK business with profit contribution up 35%.
  • Heads of Terms signed with a large UK retailer opening up a partnership opportunity with significant potential – a new rental product in a new category will be trialled in October.
  • Solid progress on new payment plan product, Fido, with $6.1m of new originations in 1H13.
  • Key partnerships extended to the medium term: Dixons to 2017 and JB Hi-Fi to late 2015.
  • Key agreements secured which are expected to build rental volumes in Australia – in 2H13 a version of Infinity will launch in JB Hi-Fi stores and a new distribution deal with Kogan will go live.
  • Operating expenses down 15% on 1H12, including a 30% reduction in corporate overheads.
  • Available cash assets of $5.4m at 30 June, no corporate debt and a renewed corporate facility.
  • Outlook reaffirmed with both positive profit trajectory and volume growth expected to continue in each six month period through 2H13 and 2014.

ThinkSmart Limited today announced a significant improvement in first-half earnings and reaffirmed guidance for ongoing profit and volume growth in each six month period through 2H13 and 2014.

The Group reported Net Profit after Tax for the six months to 30 June 2013 of $0.7 million, ahead of guidance and an improvement of $2.2 million on the previous corresponding period.

“We have made considerable progress in the past six months,” ThinkSmart Executive Chairman and Chief Executive Officer Ned Montarello said. “We expect to continue this momentum in both earnings and sales volumes in the second half of 2013 and throughout 2014.”

The UK business achieved another strong set of results, building on the record financial performance in the 2012 year, with profit up by 35%. New originations increased by 23% due to further growth from Infinity in Dixons and a promising result from the new ThinkSmart Business Leasing (“TBL“) product, which offers rental products to businesses.

“The UK business has again performed well with growth across all key metrics. Our partnership with Dixons continues to be mutually beneficial and we are also focusing on developing new products and sales channels,” Mr Montarello said.

“Sales from our new B2B leasing product, TBL, of over $1 million represents a promising start for the product. We have also signed heads of terms with a large UK retailer for a new business leasing product in a new category. This is an exciting new partnership for ThinkSmart and a product trial is planned in October. We will update the market when the contract is finalised,” Mr Montarello said.

ThinkSmart has extended the retailer operating agreements with its largest partners in both the UK and Australia. The agreement with Dixons now extends through to 2017 and JB Hi-Fi to the second half of 2015. Further, ThinkSmart announced that an Infinity product, which has driven the majority of the volume growth in the UK business since 2011, will be launched in JB Hi-Fi in September.

“The launch of a version of our successful Infinity product in Australia provides a significant opportunity to replicate our UK success with financing solutions for tablet devices,” Mr Montarello said.

The Australian business recorded volume growth of 31% with a solid performance from Fido with volumes of $6.1 million in the six month period. While rental volumes reduced, ThinkSmart expects rental performance to stabilise due to the imminent launch of an Infinity product in JB Hi-Fi and the start of the new retailer relationship with Kogan, Australia’s largest online retailer.

“The performance of the Australian business continues to improve, driven by building Fido volumes, lower costs and improving asset quality,” said Mr Montarello. “Fido sales were solid and our medium term goals are unchanged as the pipeline for growth is strong”.

“We have in front of us a series of opportunities which are as significant as any in our history.”

No Comments

Sorry, the comment form is closed at this time.