Cog Financial Services Limited · ASX:COG
Cog Financial Services — Consolidated Operations Group — H1 2018 Earnings Presentation
26 slides from Cog Financial Services's earnings presentation, Feb 27, 2018
Slide 1: Investor Presentation: 1H18 Financial Results
Investor Presentation For personal use only ASX Code: COG 1H18 Financial Results 27 February 2018 Presenters Cameron McCullagh, MD Raylee Carruthers, Group COO Nathan Thomas, Group CFO
Slide 2: Executive Summary
Executive Summary * For personal use only ˃ Organic growth in Commercial Leasing origination FY18 is forecast to increase by 29%. This translates to +38% a 44% increase in NPBT, to be recognised over four years. Revenue Growth ˃ Since December 2015 we have deployed $80m in the acquisition of operati
Slide 3: Pro Forma Segment Performance
Pro Forma Segment Performance For personal use only Commercial Finance Broking All Other / Total Total For the half year ended 31 December 2017 Equipment & Aggregation Intersegment 1H18 1H17 Movement Leasing Note $'000 $'000 $'000 $'000 $'000 $'000 % Revenue 64,548 6,545 2,775 73,868 53,594 20,274 3
Slide 4: Established Leader in Asset Finance Broking
Established Leader in Asset Finance Broking Commenced Aggregation December 2015 For personal use only For the half year ended 31 December 2017 COG Group 1 Net Expense ($1.3) million Product Distribution Lease Portfolio Asset Finance Broking & Membership Groups EBITDA $3.9 million EBITDA $4.6 million
Slide 5: Segment: Broking & Aggregation
Segment: Broking & Aggregation For personal use only For the half year ended 31 December 2017 1H18 1H17 Movement Commentary $'000 $'000 $'000 % Revenue 64,548 45,820 18,728 41% ˃ Revenue has grown 41% due to EBITDA from core operations 7,828 6,370 1,458 23% acquisitions - Fleet Network (acquired Fin
Slide 6: Acquisition of Asset Finance Brokers & Membership Groups
Acquisition of Asset Finance Brokers & Membership Groups For personal use only With $39.8 million of surplus assets, application to purchases suggests $7.2 million of additional EBITDA 1 December 2015 January 2017 March 2017 January 2018 October 2016 July 2017 February 2018 Potential ALP changes to
Slide 7: Asset Finance Broking
Group Financial Asset Finance Performance Broking For personal use only The positives were: Group NAF* in $Million 3,500 3,145 ˃ Continued strong growth in CFG membership. 3,000 2,747 2,500 ˃ Significant new Platform Partner Brokers, which 2,000 will provide increased volume and revenue in 1,631 the
Slide 8: Benefits of Membership Group
Benefits of Membership Group For personal use only COG is well progressed in improving the Membership services provided to the Asset Finance Brokers and the financiers whose products we distribute. Asset Finance Brokers join COG due to: ˃ Best commission and Volume Based Incentives (VBI) Significant
Slide 9: Segment: Commercial Equipment Leasing
Segment: Commercial Equipment Leasing For personal use only For the half year ended 31 December 2017 1H18 1H17 Movement Commentary $'000 $'000 $'000 % Revenue 6,545 5,654 891 16% ˃ As we move to 100% of entities such EBITDA from core operations 3,940 3,599 341 9% as CFG (put and call option exercisa
Slide 10: Continued Solid Organic Growth
Continued Solid Organic Growth For personal use only $m of Leases Written (OEC*) 60 55.0 Solid growth in lease origination 50 ˃ Origination 1H18 was $26.3m. This is a 52% increase 42.5 on 1H17 origination of $17.3m. 40 ˃ Lease origination is expected to reach the $55m 33.4 forecast for FY18, which i
Slide 11: Sensitivity: Value Creation – Lease Origination
Group Financial Sensitivity: Performance Value Creation – Lease Origination For personal use only While EBITDA has only increased 9%, the volume of OEC is expected to rise 29% this year (27% prior year), which results in a 44% increase in value created. FY17 FY18 Growth Actual Forecast $m $m Lease V
Slide 12: Profit and Value Created
Group& Financial Profit Performance Value Created For personal use only ˃ The accounting for leases generally recognises many costs upfront and income over the life of the leases. ˃ While the forecast growth in leases in 2018 should result in a 44% increase in NPBT, the accounting profit will be rec
Slide 13: Segment: All Other
Segment: All Other For personal use only For the half year ended 31 December 2017 1H18 1H17 Movement $'000 $'000 $'000 % Commentary Revenue 2,775 2,120 655 31% ˃ This segment includes the Hal IT business, COG EBITDA from core operations (1,330) (2,140) 810 parent entity (head office expenses) and th
Slide 14: Forecast EBITDA
Group Financial Forecast EBITDA Performance For personal use only ˃ The nature and timing of the funding of leases will significantly impact forecast profit. EBITDA (after NCI) Accounting profit FY17 FY18 FY19 $million Actual 1 Forecast Forecast Commercial Equipment Leasing 7.2 7.0 – 7.5 7.0 - 7.7 C
Slide 15: Capital Management
Capital Management For personal use only 1 Funds available for investments at 31 December 2017 = $39.58 million ˃ A new ongoing funder was contracted in February 2018. A successful implementation will further expand the portfolio of lenders at lower cost of funding. ˃ There are strong positive cashf
Slide 16: Strategy and outlook
For personal use only Financial Information Strategy and outlook 16
Slide 17: Business Strategy
Business Strategy For personal use only Clear strategy to grow Revenue Synergies ˃ Organic growth in commercial equipment leasing ˃ Consideration of additional product Volume based incentives ˃ Consumer finance Lead generation ˃ Warehouse facility or syndication of commercial lending Car purchasing
Slide 18: Priorities and Growth Initiatives
Priorities and Growth Initiatives For personal use only ˃ Aggregation membership growth and improved service offering ˃ Organic growth of brokers ˃ Organic growth of TL Rentals ˃ Equipment finance broker acquisitions ˃ Over mid-term: expand in-house funding offering to CFG and Platform members 18
Slide 19: Appendices
For personal use only Financial Information Appendices 19
Slide 20: Statutory Income Statement
Statutory Income Statement For personal use only For the half year ended 31 December 2017 1H18 1H17 Movement $’000 $’000 $’000 % Commentary Revenue from continuing operations 69,016 16,601 52,416 316% ˃ 1H17 comparatives are based on investment accounting Interest income 5,283 1,614 3,669 227% for t
Slide 21: Statutory Balance Sheet
Statutory Balance Sheet For personal use only As at 31 Dec 17 30 Jun 17 $'000 $'000 Commentary Cash and cash equivalents 40,558 39,837 Trade and other receivables 11,919 13,015 ˃ Financial assets – lease receivables Financial assets – lease receivables 15,721 11,297 relates to lease receivables in t
Slide 22: Statement of Cash Flows
Statement of Cash Flows For personal use only For the half year ended 31 December 2017 1H18 1H17 $'000 $'000 Commentary Cash flows from operating activities Receipts from customers 87,600 26,915 Payments to suppliers and employees (73,719) (22,020) ˃ The comparative period cashflow Dividends receive
Slide 23: COG Broker Partners
COG Broker Partners For personal use only Broker Partners Platform Consolidated QLD Pacific Linx Finance Consolidated Finance Group Pty Finance Group Pty Australia Pty Group Pty Limited Limited Limited Limited 62% owned* 80% owned 50% owned 50% owned Vehicle & Linx Insurance Fleet Network Pty Fleet
Slide 24: COG Broking & Aggregation Network
COG Broking & Aggregation Network For personal use only Broker Network offices Fleet Network QPF DLV QPF QPF QPF QPF (Allied Finance) V&E COG Head Office Fleet Network Linx Platform Finance Mildura Finance Fleet Avenue beCarwise Linx TL Rentals Platform CFG Melbourne Finance 24
Slide 25: Commercial Equipment Leasing
Commercial Equipment Leasing For personal use only The business model is to provide business essential assets under an operating lease with a lease period less than the life of the asset. Lease portfolio by asset type Lease Book at Original Equipment Cost Audio Visual 5.0% Commercial Vehicles 17.6%
Slide 26: Disclaimer
Disclaimer For personal use only Consolidated Operations Group Limited (Consolidated Operations Group or Company) has not considered the financial position or needs of the recipient in providing this presentation (Presentation). Persons needing advice should consult their stockbroker, bank manager,
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