Slide 1: Investor Presentation 1H19 Results
For personal use only INVESTOR PRESENTATION 1H19 RESULTS 6 months ending 31 December 2018 27 February 2019
Slide 2: 1H19 Highlights
1H19 HIGHLIGHTS Page 2 For personal use only Solid financial performance in softer market • Revenue up $29.7m on pcp - $22.1m organic growth Revenue* 39% • Organic EBITDA growth is up $2.3m $104.9m • Underlying NPATA attributable to shareholders up 25% • SME solid, novated leasing down Completed inv
Slide 3: Summary Group Financial Results
SUMMARY GROUP FINANCIAL RESULTS Page 3 For personal use only Half Year ended 31 December 2018 1 2017 1,2 change Commentary ($m) Revenue growth of $29.7m primarily comprised Revenue3 104.9 75.2 +39% organic growth (+$22.1m) in commission and fee income, higher car fleet buying sales and higher EBITDA
Slide 4: Strategic Objective
STRATEGIC OBJECTIVE Page 4 For personal use only Building the leading Australian SME business equipment finance advisor Grow origination of ✓ Current Position company owned products and shareholder returns Value Critical mass Expand in-house leasing established Leveraging company’s products capabili
Slide 5: Trusted SME Finance Advisor
TRUSTED SME FINANCE ADVISOR Page 5 For personal use only Leading SME finance advisor Estimated 17% market share of broker intermediated finance for SMEs Finance Broker Synergies Finance Product • Aggregation platforms • Prime equipment • IT • Prime auto • Compliance Owned Finance Product • Non-prime
Slide 6: Business Performance
For personal use only BUSINESS PERFORMANCE
Slide 7: 1. Finance Broking & Aggregation: Financial Performance
1. FINANCE BROKING & AGGREGATION Page 7 Financial Performance For personal use only Half Year ended 31 December ($m) 2018 1, 2 2017 change Commentary Revenue 86.9 64.5 +35% Revenue growth of $22.4m (up 35%) reflects: • Increase in commission and fee income due to increase in equipment finance volume
Slide 8: 1. Finance Broking & Aggregation: Commentary
1. FINANCE BROKING & AGGREGATION Page 8 Commentary For personal use only Australia’s largest equipment finance broking and aggregation group Group NAF #039;m COG provides aggregation services to: 4,000 • independent network member finance brokers 3,500 • COG equity owned finance brokers 3,000 2,500 1,7
Slide 9: 2. Commercial Equipment Leasing: Financial Performance
2. COMMERCIAL EQUIPMENT LEASING Page 9 Financial Performance For personal use only Half Year ended 31 December 2018 20171 change Commentary ($m) Revenue 13.4 7.9 +70% Revenue was $13.4m up 70% due to: • growth in the loan book increasing interest income EBITDA 7.6 5.1 +49% and residual value income
Slide 10: 2. Commercial Equipment Leasing: Lease Origination
2. COMMERCIAL EQUIPMENT LEASING Page 10 Lease Origination For personal use only Lease Origination Lease referrals from COG Broker network OEC Written COG Broker Leases Written (OEC) #039;m referrals 70 FY15 $22.5m $0m 60 50 FY16 $33.4m $1.3m 40 32.4 FY17 $42.5m $5.6m 30 25.2 FY18 $58.7m $9.9m 19.6 20 2
Slide 11: 2. Commercial Equipment Leasing: Book Features
2. COMMERCIAL EQUIPMENT LEASING Page 11 Book Features For personal use only Key Statistics 31 Dec 2018 30 Jun 2018 Funding 94% of total lease book has been externally funded through various funders and 6% remains internally OEC of lease book $143m $133m funded. Number of leases 2,927 2,797 Self fund
Slide 12: 3. Other
3. OTHER Page 12 For personal use only Half Year ended 31 December ($m) 20181 20171 change Commentary Revenue 4.6 2.8 +64% Segment includes COG head office expenses and Hal IT business EBITDA -1.5 -1.4 -7% Revenue up 64% due to the acquisition of Net Interest -0.2 -0.1 -100% BusinessWorks (Feb 18),
Slide 13: Balance Sheet
BALANCE SHEET Page 13 For personal use only As at 31 Dec 2018 30 June 20181 Commentary ($m) Cash and cash equivalents 16.7 36.2 Trade and other receivables 10.6 14.0 Financial assets - lease receivables 35.2 32.9 Cash decreased due to investments in Centrepoint Other assets 4.9 3.1 Finance, Heritage
Slide 14: Cash Flow Statement
CASH FLOW STATEMENT Page 14 For personal use only For the half year ended 31 December 2018 2017 ($m) Commentary Receipts from customers 132.9 93.9 Payments to suppliers and employees (108.7) (73.7) Dividends received - 0.1 Finance costs paid (4.7) (3.6) Income taxes paid (2.3) (3.0) Net cash inflow
Slide 15: Capital Management
CAPITAL MANAGEMENT Page 15 For personal use only Investments Surplus funds now largely invested with the following investments during the period: • Westlawn $14.3m • Heritage $4.9m • CFG $4.2m • Centrepoint $8.3m • Geelong Financial Group $0.3m The investments were funded via cash ($25.2m), shares (
Slide 16: FY19 Priorities & Summary
For personal use only FY19 PRIORITIES & SUMMARY
Slide 17: 2H19 Priorities
2H19 PRIORITIES Page 17 For personal use only 1. Enhance underlying performance of businesses 2. Expand COG’s in-house financial product portfolio 3. Establish external funding sources (bank senior warehouse facilities and subordinated mezzanine debt) 4. Invest in infrastructure and IT systems to su
Slide 18: Regulatory Environment
REGULATORY ENVIRONMENT Page 18 For personal use only • The Royal Commission’s Report into Misconduct in the Banking, Superannuation and Financial Services Industry was tabled in Federal Parliament on 4 February 2019 • No findings of market failure in commercial asset finance broking industry and no
Slide 19: Summary
SUMMARY Page 19 For personal use only Solid financial performance • Revenue up $29.7m on pcp - $22.1m organic growth • Underlying NPATA attributable to shareholders up 25% • Guidance for FY19 confirmed at the upper end of the range, supported by an additional circa $1.3m EBITDA from acquisitions alr
Slide 20: Disclaimer
DISCLAIMER Page 20 For personal use only Consolidated Operations Group Limited (“COG”) has not COG cautions shareholders and prospective shareholders not to considered the financial position or needs of the recipient in place undue reliance on these forward-looking statements, providing this present
Slide 21: Appendices
For personal use only APPENDICES
Slide 22: Change in Accounting Policies
CHANGE IN ACCOUNTING POLICIES Page 22 For personal use only The group has applied a number of changes in accounting policies in 1H19: Treatment of Sale of Receivables (CEL segment) 1. Derecognition: Some of COG’s finance leases were previously derecognised upon funding with certain counterparties an
Slide 23: Restatement of Comparatives: Income Statement
RESTATEMENT OF COMPARATIVES: INCOME STATEMENT Page 23 For personal use only For the half year ended 31 December 2018 Expected 2018 Derecognition 1 2 ($m) Reported Credit Loss Restated Revenue 73.8 1.4 - 75.2 EBITDA 10.4 1.4 -0.3 11.5 Net Finance costs -1.5 -1.8 - -3.3 Depreciation & amortisation -2.
Slide 24: Restatement of Comparatives: Balance Sheet
RESTATEMENT OF COMPARATIVES: BALANCE SHEET Page 24 For personal use only As at 30 Jun 2018 Expected Credit 30 Jun 2018 Notes: Derecognition 1 1 Derecognition refer to change in ($m) Reported Loss 2 Restated accounting policies slide Cash and cash equivalents 36.2 36.2 2 Expected Credit Loss refer to
Slide 25: Statutory Income Statement
STATUTORY INCOME STATEMENT Page 25 For personal use only For the half year ended 31 December Commentary 2018 2017 1 $ change ($m) Revenue 105.1 75.8 +29.3 EBITDA 14.4 11.5 +2.9 Net Finance costs -4.8 -3.2 -1.6 Share of profits of associates -0.4 0.3 -0.7 Acquisition related expenses -0.4 -0.3 -0.1 D
Slide 26: Reconciliation Between Statutory NPAT and Underlying NPATA
RECONCILIATION BETWEEN STATUTORY NPAT AND UNDERLYING NPATA Page 26 For personal use only For the half year ended 31 December 2018 2017 Variance 2018 2017 Variance ($m) ex NCI ex NCI NPAT 4.5 3.9 0.6 2.8 2.1 0.7 Acquisition related expenses after tax 0.3 0.2 0.1 0.2 0.2 - Underlying NPAT 4.8 4.1 0.7
Slide 27: Acquisition History
Page 27 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 specia