Fsa Group Limited · ASX:FSA
Fsa — Shareholder Meeting (November 2019)
30 slides from Fsa's shareholder meeting presentation, Nov 22, 2019
Slide 1: FSA Group AGM Presentation
FSA Group AGM Presentation 22 November 2019
Slide 2: Agenda
Agenda • Overview • Summary of the year “Challenges, change and progress” • Segments • Services • Consumer Lending • Financials • Strategy and Outlook FSA Group Ltd AGM presentation 2019 2
Slide 3: Overview
Overview
Slide 4: Overview
Overview Australia’s largest provider of debt solutions; direct lender to individuals What we do For over 19 years, FSA has helped thousands of Australians take control of their debt. Our large and experienced team of professionals offers a range of debt solutions and direct lending services, which
Slide 5: Overview
Overview Australia’s largest provider of debt solutions; direct lender to individuals & businesses Founded with director loans of $50,000. Initial offering debt 2000 agreements then PIA’s and bankruptcy, then home loan brokering 2002 Back door listing raised $600,000 for shareholder spread 2006 Comm
Slide 6: Summary of the year: Challenges, change and progress
Summary of the year “Challenges, change and progress”
Slide 7: Challenges, change and progress: Royal Commission
Challenges, change and progress Royal Commission • As a consequence of the Royal Commission, banks and other financial institutions adopted a softer approach to debt collection. • AFSA reported that bankruptcies for 2019 were at their lowest level in 24 years. These figures clearly reflect the outco
Slide 8: Amendments to the Bankruptcy Act
Challenges, change and progress Amendments to the Bankruptcy Act • The amendments, which took effect from 27 June 2019, limit the time to repay debt under a debt agreement to: - 3 years for non-home owners and - 5 years for home owners. • These amendments were not foreseen. • As predicted non-home o
Slide 9: Amendments to the Bankruptcy Act (continued)
Challenges, change and progress Amendments to the Bankruptcy Act (continued) • The launch has been successful with positive feedback from clients and creditors. From July to November we have assisted over 500 clients with informal arrangements. • As previously stated, we do not see the amendments as
Slide 10: Services
Services
Slide 11: Services
Services Informal Arrangements FSA offers a range of services to assist clients wishing and Debt Agreements to enter into a payment arrangement with their creditors. These services include informal arrangements, debt agreements, personal insolvency PIAs and Bankruptcy agreements and bankruptcy. FSA
Slide 12: Services - Clients
Services - Clients Informals and Debt FY2017 FY2018 FY2019 % Change Agreements New clients 5,395 5,797 4,573 -21% Clients under administration 20,194 21,885 21,725 -1% Debt managed $366m $398m $379m -5% Dividends paid $81m $82m $88m +7% PIA's and Bankruptcy FY2017 FY2018 FY2019 % Change New clients
Slide 13: Consumer Lending
Consumer Lending
Slide 14: Consumer Lending
Consumer Lending Home Loans FSA offers home loans to assist clients with property who wish to consolidate their debt. Personal Loans FSA offers personal loans to assist clients with the purchase of a motor vehicle. FSA Group Ltd AGM presentation 2019 14
Slide 15: Consumer Lending - Loan Pools
Consumer Lending - Loan Pools Loan Pool Data Home Loans Personal Loans Weighted average loan size $356,370 $22,261 Security type Residential home Motor vehicle Weighted average loan to valuation ratio 67% 91% Variable or fixed rate Variable Fixed Geographical spread All states All states FSA Group L
Slide 16: Consumer Lending - Loan Pools
Consumer Lending - Loan Pools Loan Pools FY2017 FY2018 FY2019 % Change Home loans $306m $360m $382m +6% Personal loans $35m $48m $59m +25% Total $342m $408m $441m +8% Arrears > 30 day FY2017 FY2018 FY2019 Home loans 2.21% 1.40% 1.42% Personal loans 1.56% 1.55% 3.36% Losses FY2017 FY2018 FY2019 Home
Slide 17: Consumer Lending - Funding
Consumer Lending - Funding Availability Funding Facility Type Provider Limit Maturity Date End Date Non-recourse senior Westpac $350m Jul-21 Oct-21 Home Loans Non-recourse senior Westpac $25m Jul-21 Oct-21 Non-recourse Institutional $30m Jul-21 Oct-21 mezzanine Limited recourse Personal Loans Westpa
Slide 18: Financials
Financials
Slide 19: PBT by segment
PBT by segment Profit before tax by FY2018 FY2019 % Change segment Services $10.2m $11.6m +13% Home Loans $6.0m $5.9m -1% Consumer Lending Personal Loans $3.5m $5.3m +51% Other/unallocated ($0.1m) ($0.7m) Profit before tax $19.7m $22.2m +13% Other/unallocated Includes the before tax mark to market u
Slide 20: Group financials
Group financials Financial Overview FY2018 FY2019 % Change Operating income $66.2m $69.7m +5% Profit before tax $19.7m $22.2m +13% Profit after tax attributable to members $12.6m $14.4m +14% EPS basic 10.08c 11.52c +14% Net cash inflow from operating activities $14.5m $17.1m +18% Dividend/share 7c 5
Slide 21: What's underpinning operating cash flow
What's underpinning operating cash flow Long-term annuity income FY2017 FY2018 FY2019 % Change Net cash inflow from $11.1m $14.5m $17.1m +18% operating activities No of clients / Average client loan pool size life in years - Informals/ 21,725 4.5 to 5.5 Debt Agreements Services - PIA/Bankruptcy 1,29
Slide 22: Strategy and Outlook
Strategy and Outlook
Slide 23: Strategy and Outlook Agenda
Strategy and Outlook Agenda • Services • Consumer Lending – Home Loans • Consumer Lending – Personal Loans • Earnings and Capital Management FSA Group Ltd AGM presentation 2019 23
Slide 24: Services
Services We now offer a debt agreement (DA) and an informal arrangement (IA). The IA offering is more automated than a DA. During FY2020: 1. Continue to improve our IA offering, based on client and creditor feedback; Strategy 2. Implement the IA offering across the entire team, with ongoing training
Slide 25: Services (continued)
Services (continued) Based on current call volumes/spend we believe the IA offering, once points 1 and 2 are actioned, will see us assist on average 450 to 500 clients Strategy per month. The above strategy will allow us to hold the Services PBT at historical levels. We do not see the amendments as
Slide 26: Consumer Lending – Home Loans
Consumer Lending – Home Loans Currently exploring options to: - Enlarge our management team ; - Further develop our product offering; and Growth Strategy - Expand our external origination and distribution channels, in order to grow our loan pool and PBT. To diversify our funding and de-risk our busi
Slide 27: Consumer Lending – Personal Loans
Consumer Lending – Personal Loans Growth Strategy Increasing our sales team during FY2020. By FY2021 aiming to grow our: Loan pool/PBT - Loan pool from $59m to around $100m - PBT from $5.3m to around $10.5m. We are planning a $20m mezzanine facility to support the $75m Westpac senior facility, this
Slide 28: Earnings and Capital Management
Earnings and Capital Management Earnings FY2020 expect earnings growth of 5% to 15% FY2020 expect our full year dividend to be 5c per share with the Capital balance of earnings to be: Management - Re-invested to support the growing loan pools; and - Used for an on market share buyback On market shar
Slide 29: Investor Relations Contacts
Investor Relations Contacts Mr. Tim Odillo Maher Ms. Deborah Southon Executive Director Executive Director FSA Group Limited FSA Group Limited Level 3, 70 Phillip Street Level 3, 70 Phillip Street Sydney NSW 2000 Sydney NSW 2000 T: 02 8985 5090 T: 02 8985 5091 F: 02 8985 5310 F: 02 8985 5333 E: tmah
Slide 30: Cautionary Statements and Disclaimer Regarding Forward-Looking Information
Cautionary Statements and Disclaimer Regarding Forward-Looking Information This release may contain forward-looking statements, including statements about FSA Group Limited’s (Company) financial condition, results of operations, earnings outlook and prospects. Forward-looking statements are typicall