Cog Financial Services Limited · ASX:COG
Cog Financial Services — H1 2024 Earnings Presentation
31 slides from Cog Financial Services's earnings presentation, Feb 23, 2024
Slide 1: 1H 2024 Results
1H 2024 Results 23 February 2024 Authorised by Andrew Bennett Group Chief Executive Officer
Slide 2: 1H 2024 Financial Highlights
1H 2024 Financial Highlights Strong performance continues across the Group Revenue1 EBITDA to shareholders2 $237.8m $18.8m +45% on pcp +19% on pcp NPATA to shareholders2 EPSA2 $12.6m 6.61cps +14% on pcp +12% on pcp 1 Revenue excludes interest income (1H24 $1.7m, 1H23 $0.4m). Share of results from as
Slide 3: Strong performance continues across the Group (cont.)
1H 2024 Financial Highlights Strong performance continues across the Group (cont.) Organic growth of volumes, with outstanding performance from our Novated Leasing segment Our primary sectors in the market, infrastructure and construction, have held up strongly in response to the 13 RBA cash rate in
Slide 4: Growth in EPSA and dividends per share
1H 2024 Financial Highlights Growth in EPSA and dividends per share Cents per share Interim dividend declared of 13.94 13.87 12.55 4.0 cps (1H23: 3.7 cps ) 1 1 12.55 12.01 Payout ratio of 12.52 12.83 2 10.87 8.30 8.40 60.9% (1H23: 62.0% ) 2 5.72 7.22 6.37 EPSA +12% 6.61 5.95 4.80 4.70 Dividend yield
Slide 5: COG has a successful history of acquisition and integration
Executing with Excellence COG has a successful history of acquisition and integration Growth through more verticals 11 Broking and 4 Novated 3 Asset 1 Financial Aggregation Leasing Management Advisory & Lending Linx beCarWise Westlawn CAF (20%) Heritage Fleet Network Equity-One …. Growth by going So
Slide 6: Diversity - A growing national business activity footprint
Executing with Excellence Diversity - A growing national business activity footprint NT 993 Novated Lease Customers 1,232 Salary Packaging Customers QLD 144 Broker firms 413 Brokers 714 Novated Lease Customers WA 1,259 Salary Packaging Customers 53 Broker firms 153 Brokers SA 2,977 Novated Lease Cus
Slide 7: Record volumes in the face of a higher interest rate environment
Executing with Excellence Record volumes in the face of a higher interest rate environment and tight supply +27% vs PCP $ millions $4.3bn net assets financed 3,405 4,274 in 1H 2024 2,917 2,154 2,198 1,604 1,720 2H 1,403 3,284 3,404 4,321 2,041 2,365 2,242 1H 1,344 1,524 1,631 2016 2017 2018 2019 202
Slide 8: Summary of Group financial results
Executing with Excellence Summary of Group financial results 1H24 1 1H23 1 Pcp Revenue growth of $73.9m includes organic growth (+$50.9m) and contribution from acquisitions (+$26.6m), partially offset by the $m $m Change run-off of the TL Commercial Finance book (-$1.9m) and the fact Revenue2 237.8
Slide 9: Underlying NPATA to Shareholders
Executing with Excellence Underlying NPATA to Shareholders +3% In $ millions +6.3% +9.9% 9
Slide 10: Underlying NPATA to Shareholders by segment
Executing with Excellence Underlying NPATA to Shareholders by segment In $ millions 1H24 1H23 NPATA to NPATA to shareholders shareholders (-) Less share before share (-) Less share before share NPATA to of results in of results in NPATA to of results in of results in Segment shareholders Earlypay1 E
Slide 11: Segment performance
Segment performance Novated Leasing delivered outstanding results with Finance Broking & Aggregation and Asset Management & Lending continuing to report strong business volume growth in the 1H 2024 11
Slide 12: Australia's largest asset finance broker and aggregator
Australia’s largest asset Finance Broking & Aggregation finance broker and aggregator 1 Derived from information contained in the Commercial & Asset Finance Brokers Association of Australia (CAFBA) Aggregator Benchmark Report 2020 and the Australian Finance Industry Association (AFIA) Annual Review
Slide 13: Organic volume growth continues despite a higher interest rate environment
Finance Broking & Aggregation Revenue growth of $32.9m includes organic growth (+$18.5m) and contribution from acquisitions (+$14.4m). Organic volume growth EBITDA margin contracted to 10.6% (1H23: 14.4%) and reflects (i) the lower margin contributions from the continues despite a higher recently ac
Slide 14: Novated Leasing and Salary Packaging have continuing strong momentum
Novated Leasing Novated Leasing and Salary Revenue growth of $37.9m includes organic growth (+$25.7m) from the legacy businesses Fleet Network and Packaging have continuing Becarwise and contribution from acquisitions (+$12.2m). EBITDA margin increased to 12.1% (1H23: 7.3%) and strong momentum refle
Slide 15: Strong business originations and ongoing contribution
Asset Management & Lending (formally known as Funds Management & Lending) 1 Strong business originations and ongoing contribution Revenue growth of $4.8m reflects organic growth of $6.7m 2 2 (including organic growth contribution from Equity-One of 1H24 1H23 Pcp $2.7m). This growth was partially off
Slide 16: EBITDA to shareholders
Asset Management & Lending (formally known as Funds Management & Lending) Funds management Equity-One Mortgage Fund Limited has provided significant contribution in the half (1H24: $2.5m, 1H23: 1.6m EBITDA to EBITDA to shareholders shareholders). Assets under management & Lending of $854.8m are up 2
Slide 17: Lending book is concentrated on asset backed contracts
Asset Management & Lending (formally known as Funds Management & Lending) Lending book is concentrated on asset backed contracts Lending book Funding • Established unsecured notes program operated by Westlawn • New lease and loan originations in 1H24 of $71.2m (1H23: Finance Limited continues to pro
Slide 18: Strategic acquisition – acquired 20% of CAF in 1H24
Other Strategic acquisition – acquired 20% of CAF in 1H24 1H24 1 1H231 Pcp This Segment includes COG head office activities, Hal Group IT business (Divested in FY23) and our $m $m Change investments in Earlypay Limited (ASX: EPY) and Revenue 2 - 1.7 -100% Centrepoint Alliance Limited (ASX: CAF). EBI
Slide 19: Board of Directors and Management Team
About COG Board of Directors Patrick Tuttle Peter Rollason Stephen White Cameron McCullagh Mark Crain Chairman Non-Executive Director Non-Executive Director Executive Director Executive Director Management Team Andrew Bennett Richard Balzer Philip Mcleod Chief Executive Officer Chief Financial Offic
Slide 20: Efficient capital management and strong cash position
Capital management Efficient capital management Dividend (continued) For the half-year ended 31 December 2023, the Board declared a fully franked interim and strong cash position dividend of 4.0 cents per fully paid ordinary share (2022: 3.7 cents per fully paid ordinary share). The total dividend o
Slide 21: Capital management
Capital management Capital raising • Effective 30 November 2023, COG acquired a 20% equity interest in Centrepoint Alliance Limited (ASX: CAF) for a cash consideration of $13.1m. CAF is a boutique • On 20 October 2023 the Company issued 1,463,193 fully paid ordinary shares provider of lending servic
Slide 22: Looking Forward
Executing with Excellence Looking Forward • COG will continue to remain active in the identification of strategic acquisitions (at the right price) to add to the underlying businesses organic growth trajectory; • Good levels of activity continue across all areas of the business as evidenced by the c
Slide 23: Disclaimer
Disclaimer COG Financial services Limited ('COG’) has not considered the financial position Investors should also note that COG’s past performance, including past share or needs of the recipient in providing this presentation ('Presentation'). Persons price performance, cannot be relied upon as an i
Slide 24: Appendices
Appendices 24
Slide 25: Statutory income statement
Appendices Statutory income statement 1H24 1H23 Pcp Profit on disposal of assets reflects the gain $m $m Change recognised on the disposal of the non-core HAL Revenue 1 239.5 164.3 46% Group IT business in the 1H23. EBITDA from core operations 29.7 24.5 21% Profit on disposal of assets - 0.4 -100% D
Slide 26: Reconciliation between statutory NPAT and underlying NPATA
Appendices Reconciliation between statutory NPAT and underlying NPATA Members and NCI 1 Members 1H24 1H23 Variance 1H24 1H23 Variance $m $m $m $m $m $m NPAT 14.9 12.8 2.1 9.1 8.3 0.8 Adjustments (after tax): Profit on disposal of assets - (0.3) 0.3 - (0.3) 0.3 Redundancy and restructuring costs 0.1
Slide 27: Consolidated statement of financial position
Appendices Consolidated statement of financial position As at 31 Dec 30 Jun $m 2023 2023 Cash and cash equivalents increased by $5.8m mainly due to organic Cash and cash equivalents 107.6 101.8 business trading during the 1H24. Trade and other receivables 19.0 22.4 Contract assets 3.0 2.9 Financial
Slide 28: Consolidated statement of cash flows
Appendices Consolidated statement of cash flows 1H24 1H23 1 $m $m Receipts from customers 272.3 183.5 Net cash inflow from operating activities includes $12.4m Payments to suppliers and employees (233.9) (165.5) (1H23: $12.5m) relating to the lease and loan products offered Dividends received 0.1 0.
Slide 29: Acquisition history
Appendices Acquisition history Interest Date Company Activity Acquirer acquired Price Consideration Dec-15 Platform Consolidated Group (PCG) Aggregation platform and finance broker COG 60.0% $22.9m 76% cash / 24% equity Oct-16 Consolidated Finance Group Independent equipment finance aggregator COG 8
Slide 30: Acquisition history (cont)
Appendices Acquisition history (cont) Interest Date Company Activity Acquirer acquired Price Consideration Nov-20 Access Capital Finance broker (SA, NT) QPF 80.0% $9.2m 11% cash / 39% equity / 50% debt Dec-20 Sovereign Tasmania Acquisition of minority interests Linx 4.2% $0.1m 100% cash Jun-21 Linx
Slide 31: Proportionate share of unrestricted cash attributable to members
Appendices Proportionate share of unrestricted cash attributable to members $ millions Proportionate share of unrestricted cash Total Restricted Unrestricted attributable to Cash cash1 cash Members2 Platform Group 37.7 (29.1) 8.6 6.7 QPF Group 4.5 - 4.5 2.3 Linx Group 3.0 - 3.0 1.6 Westlawn Group 37
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