Fsa Group Limited · ASX:FSA
Fsa — Shareholder Meeting (November 2020)
32 slides from Fsa's shareholder meeting presentation, Nov 27, 2020
Slide 1: FSA Group AGM Presentation
FSA Group AGM Presentation 27 November 2020
Slide 2: Agenda
Agenda • Overview • Summary of the year “Challenges and opportunity” • Segments • Services • Consumer Lending • Financials • COVID-19, Strategy and Outlook • Earnings and Capital Management FSA Group Ltd AGM presentation 2020 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 20 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
Summary of the year “Challenges and opportunity”
Slide 7: Challenges and opportunity - Services
Challenges and opportunity Services • June 2019 amendments to the Bankruptcy Act took effect. • As predicted non-home owners have been adversely affected. • July 2019 launched our new service, an informal arrangement to assist non-home owners with their debt. • The launch has been successful with po
Slide 8: Challenges and opportunity - Consumer Lending
Challenges and opportunity Consumer Lending • Developed a long term growth strategy. • Rebranded “Azora” and led by one of the most experienced management teams in the non-bank sector. • December 2019 we announced our inaugural $200m issue of non- conforming RMBS via sole arranger and manager Westpa
Slide 9: Challenges and opportunity - COVID-19
Challenges and opportunity COVID-19 • See Section “COVID-19, Strategy and Outlook” FSA Group Ltd AGM presentation 2020 9
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 FY2018 FY2019 FY2020 % Change Agreements New clients 5,797 4,573 4,327 -5% Clients under administration 21,885 21,725 19,736 -9% Debt managed $398m $379m $353m -7% Dividends paid $82m $88m $89m +1% PIA's and Bankruptcy FY2018 FY2019 FY2020 % Change New clients 4
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 2020 14
Slide 15: Consumer Lending - Loan Pools
Consumer Lending - Loan Pools Loan Pool Data Home Loans Personal Loans Weighted average loan size $356,157 $20,656 Security type Residential home Motor vehicle Weighted average loan to valuation ratio 67% 85% 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 FY2018 FY2019 FY2020 % Change Home loans $360m $382m $394m +3% Personal loans $48m $59m $63m +6% Total $408m $441m $457m +4% Arrears > 30 day FY2018 FY2019 FY2020 Home loans 1.40% 1.42% 2.55% Personal loans 1.55% 3.36% 2.41% Losses FY2018 FY2019 FY2020 Home l
Slide 17: Consumer Lending - Funding
Consumer Lending - Funding Maturity Funding Facility Type Provider Limit Drawn Date Non-recourse warehouse Westpac $350m Oct-21 $198m Home Loans Non-recourse warehouse Institutional $20m Oct-21 $15m Securitised Institutional Mar-51 $178m Limited recourse Westpac $75m Apr-23 $42m warehouse Personal L
Slide 18: Financials
Financials
Slide 19: PBT by segment
PBT by segment Profit before tax by FY2019 FY2020 % Change segment Services $11.6m $11.7m +1% Home Loans $5.9m $7.4m +26% Consumer Lending Personal Loans $5.3m $5.2m -3% Other/unallocated ($0.7m) $0.4m Profit before tax $22.2m $24.8m +12% FSA Group Ltd AGM presentation 2020 19
Slide 20: Group financials
Group financials Financial Overview FY2019 FY2020 % Change Operating income $69.7m $68.2m -2% Profit before tax $22.2m $24.8m +12% Profit after tax attributable to members $14.4m $16.3m +13% EPS basic 11.52c 13.05c +13% Net cash inflow from operating activities $17.1m $19.4m +14% Dividend/share 5c 6
Slide 21: What's underpinning operating cash flow
What's underpinning operating cash flow Long-term annuity income FY2018 FY2019 FY2020 % Change Net cash inflow from $14.5m $17.1m $19.4m +14% operating activities No of clients / Average client loan pool size life in years - Informals/ 19,736 4.5 to 5.5 Debt Agreements Services - PIA/Bankruptcy 1,30
Slide 22: COVID-19, Strategy and Outlook
COVID-19, Strategy and Outlook
Slide 23: COVID-19 - Overview
COVID-19 - Overview • We acted promptly to ensure we provided a safe working environment for our people and implemented flexible work arrangements including working from home. • Due to Government and Bank support packages and temporary Legislative changes*: • (New Clients) COVID-19 negatively impact
Slide 24: COVID-19 - New Clients - Services
COVID-19 - New Clients - Services New client numbers for March to October 2020 vs pcp Services - down 37% for Informals/Debt Agreements; and - down 67% for PIA/Bankruptcy In response we have restructured parts of our business to reduce costs. Strategy and We believe demand for our services will star
Slide 25: COVID-19 - New Clients - Consumer Lending
COVID-19 - New Clients - Consumer Lending Loan pools at October 2020 vs January 2020 Consumer - Home loan pool $387m relatively unchanged; and Lending - Personal loan pool $65m up 2% During COVID-19 we focused on arrears and hardship management. Strategy and We are now preparing to take “Azora” to t
Slide 26: COVID-19 - Existing Clients - Services
COVID-19 - Existing Clients - Services Debt Agreement Collections 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Jan-2020 Feb-2020 Mar-2020 Apr-2020 May-2020 Jun-2020 Jul-2020 Aug-2020 Sep-2020 Oct-2020 Actual Cash Collections Contracted Cash Collections FSA Gr
Slide 27: COVID-19 - Existing Clients - Home Loans
COVID-19 - Existing Clients - Home Loans Home Loan Arrears and Hardships 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Arrears > 30 days Hardships FSA Group Ltd AGM presentation 2020 27
Slide 28: COVID-19 - Existing Clients - Personal Loans
COVID-19 - Existing Clients - Personal Loans Personal Loan Arrears and Hardships 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Arrears > 30 days Hardships FSA Group Ltd AGM presentation 2020 28
Slide 29: Earnings and Capital Management
Earnings and Capital Management
Slide 30: Earnings and Capital Management
Earnings and Capital Management Due to increased cash collections and a reduction in costs we expect Earnings FY2021 earnings growth of 5% to 15% Due to our strong net cash inflow driven by long term annuity income Capital from our clients, we expect FY2021 full year dividend to be between 6c Manage
Slide 31: Investor Relations Contacts
Investor Relations Contacts Mr. Tim Odillo Maher Ms. Deborah Southon Executive Director Executive Director FSA Group Limited FSA Group Limited Level 13, 1 Oxford Street Level 13, 1 Oxford Street Darlinghurst NSW 2010 Darlinghurst NSW 2010 T: 02 8985 5090 T: 02 8985 5091 F: 02 8985 5310 F: 02 8985 53
Slide 32: 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