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Consumer loans drive Easyhome Q1 growth PDF Print E-mail
Written by HGO Staff   

MISSISSAUGA, Ontario (10 May 2012) - Growth in its consumer loan segment continued to drive both revenue and earnings for Easyhome as sales in its core big ticket leasing business continued to stagnate, the company has reported. To staunch the bleeding, it plans to close some 15 stores during the first half of 2012.

Revenue for the three months ending March 31, 2012, was $49.8 million, a gain of 7.8% from the $46.2 million in the corresponding period of 2011. Same store sales, including the consumer loan operation, grew 8.3%.

Net income was $2.6 million or 22 cents per share, an increase of 10.1% from the $2.4 million or 20 cents per share.

"Our results for the first quarter continue the trend of increased revenues and improved performance," Easyhome president and chief executive officer David Ingram said in a statement. "The increase in earnings is a direct result of the growth in Easyfinancial services which increased its operating income and more than offset the year-over-year investment in corporate infrastructure. During the quarter, the consumer loans receivable portfolio grew by $1.2 million to finish the quarter at $48.8 million and Easyfinancial's operating margin for the quarter improved to over 34%."

Ingram noted that Easyfinancial's revenue increase 80% to $8.2 million from $4.6 million for same period of 2011. The improvement was the result of the increase in the consumer loans receivable portfolio from $29.9 million to $48.8 million.

However, revenue for the company's leasing and franchising operations were relatively unchanged year-over-year at $41.2 million and $400,000, respectively.

"Given the challenging retail environment we are satisfied in our overall results for the quarter," Ingram said. "We increased revenues and earnings. We have also begun to leverage the control and infrastructure enhancements we made last year. We are not, however, satisfied with the productivity gains and pace of change we have achieved in our leasing business."

To help turn the tide, Ingram said that in addition to the two stores Easyhome closed during the first quarter, the company will close approximately 13 more underperforming stores in the second quarter. He noted the majority of these locations are in facilities with leases that are set to expire over the next months.

These closures will have a negative impact on second quarter earnings of about five cents per share, but Ingram said they will be marginally accretive over the full 2012 fiscal year and positive to earnings in future years as a large portion of the lease portfolio at these closed locations will migrate to other nearby locations.

At the end of March, Easyhome operated 216 leasing stores (including five consolidated franchises), 90 Easyfinancial locations and had 44 franchise locations in both Canada and the United States.

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