Cog Financial Services Limited · ASX:COG
Cog Financial Services — Consolidated Operations Group — FY2020 Earnings Presentation
27 slides from Cog Financial Services's earnings presentation, Aug 27, 2020
Slide 1: Investor Presentation: Year End Results 30 June 2020
INVESTOR PRESENTATION For personal use only YEAR END RESULTS 30 JUNE 2020 CONSOLIDATED OPERATIONS GROUP LIMITED (This release has been authorised by the COG Board) 27 August 2020
Slide 2: Financial Year 2020 Highlights
For personal use only 01 Financial Year 2020 Highlights
Slide 3: FY20 Highlights
FY20 HIGHLIGHTS Page 3 For personal use only CONSOLIDATED OPERATIONS GROUP LIMITED (COG) Solid financial performance amid COVID-19 crisis • Revenue up $5.0m on pcp – $3.5m organic growth • Underlying EBITDA to shareholders of $21.3m Revenue* • Underlying NPATA attributable to shareholders up 6% 2% $
Slide 4: Summary Group Financial Results
SUMMARY GROUP FINANCIAL RESULTS Page 4 For personal use only Year ended 30 June 2020 1 2019 1 Change Commentary ($m) Revenue growth of $5.0m primarily comprised Revenue2 222.2 217.2 +2% organic growth (+$3.5m) in commission and fee income in the FB&A segment. EBITDA 31.2 29.9 +4% EBITDA margin up to
Slide 5: COG is Australia's largest asset finance broking and aggregation group
COG is Australia’s largest asset finance broking and aggregation group, and Page 5 a trusted leader in SME and auto finance solutions. For personal use only Estimated 17% market share of broker intermediated finance Small Medium Enterprises (SMEs) Banks/Non-banks • asset/equipment/auto finance • ins
Slide 6: Business Performance
For personal use only 02 Business Performance
Slide 7: Finance Broking & Aggregation Segment: Financial Performance
1. FINANCE BROKING & AGGREGATION SEGMENT Page 7 Financial Performance For personal use only Year ended 30 June ($m) 2020 1, 2 2019 1, 2 Change Commentary Revenue 194.0 184.4 +5% Revenue growth of $9.6m (up 5%) reflects: • Increase in commission and fee income due to growth in equipment finance volum
Slide 8: Finance Broking & Aggregation Segment: Broker Services and Group NAF
1. FINANCE BROKING & AGGREGATION SEGMENT Page 8 Broker Services and Group NAF For personal use only Australia’s largest asset finance broking and aggregation group COG provides aggregation services to: Group Net Asset Financed • independent network member finance brokers $'m • COG equity owned finan
Slide 9: Commercial Equipment Financing Segment: Financial Performance
2. COMMERCIAL EQUIPMENT FINANCING SEGMENT Page 9 Financial Performance For personal use only Year ended 30 June 20201 20191 Change Commentary ($m) Revenue 21.1 23.9 -12% Revenue contraction of $2.8m (-12% on pcp) reflects lower: EBITDA 12.1 13.6 -11% • originations in the 2H20 due to the impact of t
Slide 10: Commercial Equipment Financing: Lease and Loan Origination
2. COMMERCIAL EQUIPMENT FINANCING SEGMENT Page 10 Lease and Loan Origination For personal use only Lease and Loan Origination Total OEC of $31.4 written in FY20 is 39% lower on pcp (FY19: $51.8m) due to the scale back of operations in response to the challenging trading conditions during the COVID-1
Slide 11: Commercial Equipment Financing: Book Features
2. COMMERCIAL EQUIPMENT FINANCING SEGMENT Page 11 Book Features For personal use only Key Statistics 30 Jun 2020 30 Jun 2019 Funding 99% of total lease book has been externally funded through various funders and 1% remains internally funded OEC of lending book 1 $141m $142m Self funded leases at 30
Slide 12: Other Segment
3. OTHER Page 12 For personal use only Year ended 30 June ($m) 2020 1 2019 1 Change Commentary Revenue 7.1 8.9 -20% Segment includes COG head office expenses and Hal IT business EBITDA -1.9 -3.1 +39% Revenue down on lower HAL Group sales, although Net Interest -0.2 -0.4 +50% profitability of the IT
Slide 13: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Page 13 For personal use only As at 30 June 2020 30 June 2019 Commentary ($m) Cash and cash equivalents 34.7 26.0 Trade and other receivables 12.7 12.4 Cash and cash equivalents increase is reflective of lower Financial assets - lease receivables 34.1 36.
Slide 14: Consolidated Cash Flow Statement
CONSOLIDATED CASH FLOW STATEMENT Page 14 For personal use only For the year ended 30 June 2019 2019 ($m) Commentary Receipts from customers 284.6 278.2 Payments to suppliers and employees (209.8) (210.9) Net cash inflow from operating activities Finance costs paid (8.7) (9.2) includes $49.1m (FY19:
Slide 15: Capital Management
CAPITAL MANAGEMENT Page 15 For personal use only Corporate debt facility Dividend The Group has a corporate debt facility with Bendigo Bank Limited. During On 15 October 2019, the Company adopted a dividend policy, targeting the financial year ending 30 June 2020, the Group obtained a 3 months a div
Slide 16: FY21 Priorities & Summary
For personal use only 03 FY21 Priorities & Summary
Slide 17: FY21 Priorities
FY21 PRIORITIES Page 17 For personal use only 1. Continue with finance broker acquisitions – COVID has demonstrated that these are resilient and robust businesses with low fixed costs and can shrink variable costs quickly in times of stress 2. Expand the managed investment scheme offering to increas
Slide 18: FY21 Outlook
FY21 OUTLOOK Page 18 For personal use only 1. COVID -19 will continue to impact SMEs until at least mid 2021 2. FB & A businesses are very resilient – mainly variable costs 3. July 2020 performance has been very strong – 10% greater PBT than pcp 4. Not providing full year guidance
Slide 19: Disclaimer
DISCLAIMER Page 19 For personal use only Consolidated Operations Group Limited ('COG’) has not considered COG will not undertake any obligation to release publicly any the financial position or needs of the recipient in providing this revisions or updates to these forward-looking statements to prese
Slide 20: Appendices
For personal use only 04 Appendices
Slide 21: Platform Finance/CFG Membership
PLATFORM FINANCE/CFG MEMBERSHIP Page 21 For personal use only Number of New Members • Members have increased by 113% since 2016 • Members have increased by 14% in FY20 • Industry dynamics and IT continued to encourage increased membership
Slide 22: Platform Finance/CFG Membership (continued)
PLATFORM FINANCE/CFG MEMBERSHIP (continued) Page 22 For personal use only Growth and New Members – Volumes ($’m) • Growth of 70% since June 2016 • Growth of 5% during FY20
Slide 23: Change in Accounting Policies
CHANGE IN ACCOUNTING POLICIES Page 23 For personal use only The Group has applied the following mandatory changes in accounting policies in FY20: AASB 16 - Leases (effective 1 July 2019) The Group has adopted AASB 16 Leases in the current financial period, consistent with the mandatory adoption date
Slide 24: Statutory Income Statement
STATUTORY INCOME STATEMENT Page 24 For personal use only For the year ended 30 June ($m) 2020 2019 $ Change Commentary Net interest expense in FY20 includes the impact of $0.4m Revenue 1 222.2 217.2 +5.0 related to AASB16 Leases first year adoption. EBITDA 31.2 29.9 +1.3 Impairment includes $10.8m o
Slide 25: Reconciliation Between Statutory NPAT and Underlying NPATA
RECONCILIATION BETWEEN STATUTORY NPAT AND UNDERLYING NPATA Page 25 For personal use only For the year ended 30 June 2020 2019 Variance 2020 2019 Variance ($m) ex NCI ex NCI NPAT -5.4 8.5 -13.9 -10.0 4.3 -14.3 Acquisition related expenses after tax 0.5 0.6 -0.1 0.4 0.5 -0.1 Redundancy and restructuri
Slide 26: Acquisition History
Page 26 ACQUISITION HISTORY For personal use only Date Company Activity Acquirer Interest Price Consideration Dec 15 Platform Consolidated Aggregation platform + ownership of finance COG 60% $22.9m 76% cash/ 24% equity Group (PCG) brokers Oct 16 Consolidated Finance Group Largest independent special
Slide 27: Acquisition History cont.
Page 27 ACQUISITION HISTORY cont. For personal use only Date Company Activity Acquirer Interest Price Consideration Jul 19 QPF Holdings Acq of outstanding minority interests COG Outst. 5.6%1 $1.7m 100% cash 4 Oct 19 Platform Consolidated Group Acq of outstanding minority interests COG Outst. 3.6%2 $
Consolidated Operations Group — FY2020 Earnings Presentation on 6ix