Fsa Group Limited · ASX:FSA
Fsa — Investor Presentation (September 2013)
29 slides from Fsa's investor presentation, Sep 6, 2013
Slide 1: FSA Group Investor Presentation
For personal use only FSA Group Investor Presentation 6 September 2013
Slide 2: Agenda
Agenda For personal use only • Overview • Core division – Services • Growth divisions – Home Loans and Small Business • Financial results • Outlook • Why invest in FSA? 2
Slide 3: Overview
For personal use only Overview 3
Slide 4: Overview
Overview For personal use only Australia’s largest provider of debt solutions; direct lender to individuals & businesses 2000 Founded with director loans of $50,000 2002 Back door listing raised $600,000 2009 Raised $5.2m to underpin loan pools 2011 to 2013 $6.2m share buy back and $10.5m in dividen
Slide 5: Overview
Overview For personal use only 3 Non‐executive directors ‐ 11, 7, 3 years Board 2 Executive founding directors ‐ 14 years each Shareholdings Substantial shareholdings of founding directors ‐ 46% Founding directors ‐14 years each Long Serving CFO ‐ 12 years Executive Team 6 key executives ‐ 13, 11, 8
Slide 6: Core Division: Services
For personal use only Core Division Services 6
Slide 7: What drives demand?
For personal use only $0 $10 $20 $30 $40 $50 $60 $ bn Aug-2002 Apr-2003 Dec-2003 Aug-2004 Apr-2005 Dec-2005 Aug-2006 Total Balances Apr-2007 Dec-2007 Aug-2008 Apr-2009 Dec-2009 Credit Card Debt $bn Aug-2010 Apr-2011 Repayments Dec-2011 Aug-2012 What drives demand? Apr-2013 Source: RBA % 0% 30% 60% 9
Slide 8: How does FSA assist?
How does FSA assist? For personal use only FSA assists individuals wishing to enter into a formal payment arrangement with their creditors through: 1. Debt Agreement 2. Personal Insolvency Agreement 3. Bankruptcy FSA is Australia’s largest provider of debt solutions 8
Slide 9: FSA's Services division
FSA’s Services division For personal use only Largest provider – market share 48%* Over 17,500 clients, owing $301m Debt Agreements Low arrears, $79m paid to creditors in 2013 Superior returns to creditors compared to market Fee for service income, delivering annuity cash flow Personal Insolvency On
Slide 10: FSA is the leader in debt agreements
FSA is the leader in debt agreements For personal use only FSA’s Market Share Market Size FSA’s Market Total Number of Share % Agreements 60% 12,000 50% 10,000 40% 8,000 30% 6,000 20% 4,000 10% 2,000 0% 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 10
Slide 11: FSA's competitive advantage
FSA’s competitive advantage For personal use only Direct client Via web and TV – controlled, selective and low cost acquisition model No third party referral channels Clients are Understand and assess debtor and creditor clients’ needs Tailor solutions which are affordable, sustainable and viable mi
Slide 12: Growth Divisions: Home Loans and Small Business
For personal use only Growth Divisions Home Loans and Small Business 12
Slide 13: Home Loans
Home Loans For personal use only FSA assists individuals with property, who are unlikely to conform to the lending criteria of banks, wishing to consolidate their debt FSA is one of the few remaining non‐conforming home loan lenders in the market 13
Slide 14: Small Business
Small Business For personal use only FSA assists small to medium businesses with cash flow management by providing finance secured against invoices 14
Slide 15: Loan Pools
Loan Pools For personal use only Home Loans Small Business Loan Pool Size $221m Loan Pool Size $20m Average Loan Size $233,000 Average Loan Size $256,000 Average Weighted LVR 67% Average Weighted LVR Ranges 55% to 65% Variable Rate Borrowers 100% Variable Rate Borrowers 100% Geographical Spread Aust
Slide 16: Strategy: Home Loans & Small Business
Strategy: Home Loans & Small Business For personal use only Develop a track record in lending Previously Limit growth in loan pools until conditions improve Today Focus on growing loan pools 16
Slide 17: Financial Results
For personal use only Financial Results 17
Slide 18: PBT by division
PBT by division For personal use only FY2011 FY2012 FY2013 % Services $10.6m $11.6m $11.7m 1% Home Loans $4.2m $4.1m $5.1m 24% Small Business $0.6m ($0.7m) $0.8m 211% Other ($0.1m) ($0.1m) $0.1m ‐ Profit before tax $15.3m $14.9m $17.8m 19% Home Loans pool $229m $232m $221m Small Business pool $12m $
Slide 19: Group financials
Group financials For personal use only FY2011 FY2012 FY2013 % Revenue and income $54.1m $59.0m $64.4m 9% Profit before tax $15.3m $14.9m $17.8m 19% Profit after tax 1 $9.0m $8.5m $10.8m 26% Operating cash flow 2 $5.6m $9.4m $14.0m 49% NTA backing/share 34.9c 37.8c 42.3c 12% EPS basic 6.51c 6.27c 8.5
Slide 20: PAT compared with Operating cash flow
PAT compared with Operating cash flow For personal use only 16 Millions 14 12 10 8 6 4 2 - 2008 2009 2010 2011 2012 2013 Net profit after tax attributable to members Net cash inflow from operating activities 20
Slide 21: What's driving operating cash flow?
What's driving operating cash flow? Long-term annuity income from an increased number of clients For personal use only Avg client FY2010 FY2011 FY2012 FY2013 life (years) Operating cash flow $2.5m $5.6m $9.4m $14.0m Debt Agreement clients 11,050 14,394 16,681 17,751 4.5 to 5 PIA/Bankruptcy clients 9
Slide 22: Capital requirements for growth
Capital requirements for growth For personal use only Operating cash flow ‐ $9.4m in 2012 and $14.0m in 2013 Investing cash flow ‐ CAPEX around $500k pa (stable) Business now generating around $12m a year in free cash flow Future capital requirements to support loan pool growth • Home Loans ‐ $3.0m
Slide 23: Balance sheet summary
Balance sheet summary For personal use only Assets Liabilities Cash 11.0m Payables 11.5m Receivables 1 62.1m Borrowings 3.6m Intangibles 3.4m Deferred Tax Liability 1 13.3m Other 1.5m Provisions and Other 7.0m Loan Pool Assets Loan Pool Liabilities Cash – Factoring 2 2.9m Borrowings factoring 3 22.3
Slide 24: Return on Equity
Return on Equity For personal use only Return on Equity 35% 30% 32% 25% 20% 20% 19% 15% 13% 18% 15% 10% 5% 0% 2008 2009 2010 2011 2012 2013 ROE expected to increase – targeting > 20% 24
Slide 25: Outlook and Why invest in FSA?
For personal use only Outlook and Why invest in FSA? 25
Slide 26: Outlook
3 year outlook For personal use only Services Maintain our leading position in a niche market Home Loans Growth in loan pool Small Business Growth in loan pool Opportunities New products to our existing client base Earnings, Earnings and dividend growth Dividends and To continue with on market buy b
Slide 27: Why invest in FSA?
Why invest in FSA? For personal use only 1. Largest provider of debt solutions 2. One of the few remaining non‐conforming home loan lenders 3. Established track record in factoring finance to small businesses 4. Business performs well across economic cycles 5. Experienced, long serving executive tea
Slide 28: Investor Relations Contacts
Investor Relations Contacts For personal use only 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 9293 6054 T: 02 9293 6058 F: 02 9293 6032 F
Slide 29: Disclaimer
Disclaimer For personal use only • This presentation is designed to provide a general overview of the activities and financial position of FSA Group Limited. The material set out in the presentation is current as at the date of this presentation. It is information in summary form and does not purpor