Record Q1 results for GoEasy
MISSISAUGA - GoEasy, parent of EasyHome and EasyFinancial, recently reported record results for the first quarter of 2019.
GoEasy, which offers leasing and lending services in the alternative financial services market and aims to bridge the gap between traditional financial institutions and payday loan companies, says its loan portfolio increased from $602 million to $879 million, up 46%.
The company also said revenue Increased from $115 million to $140 million, up 22%; net income Increased from $11 million to $18 million, up 65% and quarterly earnings per share increased from $0.77 to $1.18, up 53%.
During the quarter, the company generated $219 million of total loan originations, up 8 per cent from the $202 million in the first quarter of 2018.
GoEasy says the net charge-off rate remained consistent with the fourth quarter of 2018 at 13.1%, up from 12.4% in the first quarter of 2018 and within the company’s guided range of 11.5% to 13.5%for 2019.
The company says growing revenues and improved operating leverage led to record margins, net income, earnings per share and return on equity. Operating income grew to $38.8 million, up 56%from $24.9 million in the first quarter of 2018.
The company says it’s growing in popularity amongst consumers looking for a financial alternative, as the total application volume increased by 11 per cent. goeasy also says revenue grew to $105 million, up 30%, and its secured loan portfolio grew to $68.4 million, up from $19.7 million.
Demonstrating growth in popularity, the company says 63% of net loan advances in the quarter were issued to new customers, up from 58%. Brand awareness sits at 82 per cent, up from 77%, and the average loan book per branch improved to $3.1 million, an increase of 41%.
The delinquency rate on the final Saturday of the quarter was 4.4%, consistent with the 4.5%reported in the same period of 2018.
The company boasts an operating income of $41.4 million and an operating margin of 39.5%, an increase from the 36.7% reported in the first quarter of 2018. The company says revenue grew to $35.2 million, up 2% from $34.4 million, while same store revenue increased 4.7 per cent, compared to 3.6%.
The consumer lending portfolio within EasyHome stores increased to $24.4 million, up from $8.5 million while revenue from consumer lending increased to $3.4 million, up from $1.1 million.
The company appears to be enjoying steady growth, as it experienced its 36th consecutive quarter of same store sales growth and 71st consecutive quarter of positive net income.
GoEasy says total assets were $1.1 billion as of March 31, 2019, an increase of 46% from $755 million as at March 31, 2018, driven by the growth in the consumer loan portfolio.
The company completed an amendment to its pre-existing senior secured revolving credit facility provided by a syndicate of banks. The amendment extended the maturity date to February 2022 (from October 2020) and increased the maximum principal amount available from $174.5 million to $189.5 million.
Based on the current bankers acceptance rate of approximately 1.86% and Prime Rate of 3.95% as of May 1, 2019, the interest rate on the principal amount drawn would be 5.11% or 5.95%, at the option of the company.
Based on the cash on hand at the end of the quarter and the borrowing capacity under the company’s amended revolving credit facility, the company had approximately $265 million in funding capacity, which will allow it to achieve its targets for the growth of its consumer loan portfolio through to the third quarter of 2020.