Cog Financial Services Limited · ASX:COG
Cog Financial Services — FY2022 Earnings Presentation
29 slides from Cog Financial Services's earnings presentation, Aug 26, 2022
Slide 1: FY 2022 Results
For personal use only FY 2022 Results 26 August 2022 Authorised by Andrew Bennett Group Chief Executive Officer
Slide 2: About COG
About COG Australia’s largest asset For personal use only finance broker and aggregator & a growing retail fixed interest funds manager 1 Derived from information contained in the Commercial & Asset Finance Brokers Association of Australia (CAFBA) Aggregator Benchmark Report 2020 and the Australian
Slide 3: About COG: asset finance broking, aggregation and funds manager
About COG COG is an ASX listed provider of asset finance For personal use only broking and aggregation services & a growing retail fixed interest funds manager Finance Broking & Aggregation Funds Management & Lending • Australia’s largest asset finance broking and • Funds Management covers a contrib
Slide 4: Our business model
About COG Our business model For personal use only FB&A FINANCE & INSURANCE Brokerage Fees FUNDING Unsecured Notes and MIS Funds Management and Lending Banks, Non-Banks, Insurance Companies (75% owned) Borrowers FINANCE1 ASSETS FINANCED Management fees and net interest margin 1 Finance and operating
Slide 5: FY 2022 Highlights
FY 2022 Highlights Strong performance continues across all business units For personal use only • Ongoing investment in complementary businesses (finance broking, insurance broking, and novated leasing) to consolidate COG's position as Australia’s largest asset Revenue1 EBITDA to shareholders2 finan
Slide 6: Growth in EPSA and dividends per share
FY 2022 Highlights Growth in EPSA and dividends per share For personal use only Cents per share Final dividend declared of 13.94 4.8 cps (FY21: 6.0 cps ) 1,2 1,2 EPSA 12.01 13.87 Total FY22 dividends of 8.3 cps1,2 show 10.87 +28% a 15% increase on FY21 8.30 (7.22 cps1,2) 7.22 5.95 5.72 4.80 Payout r
Slide 7: Summary of Group financial results
Summary of Group financial results Revenue growth of $50.3m includes organic growth Our results For personal use only (+$46.7m) and contribution from acquisitions (+7.4m), partially offset by a decrease in government subsidies For the year ended 30 June 2022 1 2021 1, 5 Pcp received (-$3.8m). $m $m
Slide 8: Underlying NPATA to Shareholders
Summary of Group financial results Underlying NPATA to Shareholders For personal use only In $ millions Government subsidies $0.1 Government subsidies +5.6% +13.6% +41% $1.8 +22.0% 8
Slide 9: Underlying NPATA to Shareholders by segment
Summary of Group financial results Underlying NPATA to Shareholders by segment For personal use only In $ millions FY22 FY21 NPATA to NPATA to shareholders shareholders (-) Less before (-) Less before NPATA to government government NPATA to government government Segment shareholders subsidies1 subsi
Slide 10: Segment performance
For personal use only Segment performance Finance Broking & Aggregation and Funds Management & Lending segments reported strong FY22 profit growth 10
Slide 11: Finance Broking & Aggregation: record volumes
Finance Broking & Aggregation +30% Record volumes despite For personal use only supply chain challenges vs PCP $ millions $6.7bn net assets financed 3,405 in FY 2022 2,154 2,917 2,198 1,604 1,720 2H 1,403 3,284 2,041 2,365 2,242 1H 1,344 1,524 1,631 2016 2017 2018 2019 2020 2021 2022 11
Slide 12: Finance Broking & Aggregation: increased volumes drive growth
Finance Broking & Aggregation Increased volumes drive For personal use only Revenue growth of $44.7m includes organic growth (+$45.2m) with strong performance from the novated organic growth lease business and contribution from acquisitions (+2.3m), partially offset by a decrease in government subsi
Slide 13: Our Aggregation & Broker brands
Finance Broking & Aggregation Our Aggregation & Broker brands For personal use only 100% OWNED COG provides aggregation services to 100% OWNED • Independent network member finance brokers • COG equity owned finance brokers 75% COG offers finance brokers OWNED • Access to wider panel of financiers an
Slide 14: Funds Management & Lending: Westlawn paves the way for growth
Funds Management & Lending Westlawn paves the way for growth - new business For personal use only volumes strong in FY221 For the year ended 30 June 2022 2 2021 2, 3 Pcp Revenue growth of $5.4m includes organic growth in Westlawn of $2.8m and contributions from Equity-One $m $m Change acquisition of
Slide 15: Funds Management & Lending: Westlawn positioned for growth
Funds Management & Lending EBITDA to shareholders Westlawn positioned for growth For personal use only $ millions Organic growth in Westlawn is being achieved by the distribution of loan products through COG's broker 13.3 network 11.6 Westlawn's chattel mortgage origination volumes 4.3 6.2 through t
Slide 16: Lending book concentrated on asset backed contracts
Funds Management & Lending Lending book concentrated Lending book For personal use only • The present value (PV) of the total lending book ($220.4m1) on asset backed contracts includes COG’s 100% owned subsidiary TL Commercial Finance’s legacy portfolio of $31.8m ($26.7m of lease receivables, includ
Slide 17: Other: Earlypay delivers significant contribution
Other Earlypay delivers significant For personal use only contribution For the year ended 30 June 20221 20211, 2 Pcp Segment includes COG head office expenses, Hal $m $m Change Group IT business and the investment in Earlypay Limited (ASX: EPY) Revenue 3 8.0 7.8 3% EBITDA (0.3) (0.8) 63% Revenue gro
Slide 18: Consolidated statement of financial position
Consolidated statement of financial position As at 30 Jun 30 Jun For personal use only $m 2022 2021 Cash and cash equivalents decreased by $18.4m mainly due to loan Cash and cash equivalents 76.1 94.5 originations in Westlawn during the financial year. Trade and other receivables 18.9 18.2 Contract
Slide 19: Consolidated statement of cash flows
Consolidated statement of cash flows For the year ended 30 June 2022 2021 1 For personal use only $m $m Net cash inflow from operating activities includes Receipts from customers 519.4 456.0 $263.3m (FY21: $257.7m) relating to the lease and loan Payments to suppliers and employees (292.4) (250.4) pr
Slide 20: Capital management
Capital management Efficient capital management Dividend (continued) For personal use only For the year ended 30 June 2022, the Board declared a final dividend of 4.8 cents per and strong cash position fully paid ordinary share (FY21: 6.0 cents per fully paid ordinary share on a post share consolida
Slide 21: Capital management: capital raising and investments
Capital management For personal use only Capital raising Investments (continued) On 21 October 2021 the Company issued 11,874,994 fully paid ordinary shares under an • On 1 March 2022, Westlawn acquired a 70% controlling interesting in Equity-One institutional placement offer, raising $16.0m. On 1 D
Slide 22: Disclaimer
Disclaimer For personal use only 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
Slide 23: Appendices
For personal use only Appendices 23
Slide 24: Statutory income statement
Appendices Statutory income statement For personal use only Impairment relates to the write down of $0.1m in corporate bonds and write off of $0.5m in trail commission For the year ended 30 June 2022 2021 Pcp receivables due to a financier contract renegotiation $m $m Change (where, going forward, v
Slide 25: Reconciliation between statutory NPAT and underlying NPATA
Appendices Reconciliation between statutory NPAT For personal use only and underlying NPATA Members and NCI 1 Members For the year ended 30 June 2022 2021 Variance 2022 2021 Variance $m $m $m $m $m $m NPAT 28.6 (17.4) 46.0 19.7 (26.4) 46.1 Adjustments (after tax): Impairment 0.6 37.3 (36.7) 0.6 37.2
Slide 26: Prior period reclassifications to EBITDA
Appendices Prior period reclassifications to EBITDA For personal use only Reclassification adjustments have been made to prior year EBITDA (and EBITDA to Members) to conform with current year presentations as follows: Funds Management & FY21 FB&A Lending Other FY21 (Original) Reclassifications Recla
Slide 27: Acquisition history
Appendices Acquisition history For personal use only 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 fi
Slide 28: Acquisition history (continued)
Appendices Acquisition history (continued) For personal use only Interest Date Company Activity Acquirer acquired Price Consideration Jul-19 QPF Acquisition of minority interests COG 5.6% $1.7m 100% cash Oct-19 PCG Acquisition of minority interests COG 3.6% $1.1m 50% cash / 50% equity Nov-19 Fleet N
Slide 29: Proportionate share of unrestricted cash attributable to members
Appendices Proportionate share of unrestricted cash attributable For personal use only to members $ millions Proportionate share of unrestricted cash Total Restricted Unrestricted attributable to Cash cash1 cash Members2 PCG Group 14.7 (6.5) 8.2 7.0 QPF Group 5.7 - 5.7 3.0 Linx Group 3.2 - 3.2 1.7 W
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