Cog Financial Services Limited · ASX:COG
Cog Financial Services — FY2023 Earnings Presentation
30 slides from Cog Financial Services's earnings presentation, Aug 25, 2023
Slide 1: FY 2023 Results
FY 2023 Results 25 August 2023 Authorised by Andrew Bennett Group Chief Executive Officer
Slide 2: FY 2023 Financial Highlights
FY 2023 Financial Highlights Strong performance continues across all business units Revenue1 EBITDA to shareholders2 $363.2m $33.9m +13% on pcp4 -5% on pcp4 +14% on pcp4, 5 +8% on pcp4, 5 NPATA to shareholders2 EPSA2 $23.7m 12.55cps -5% on pcp4 -10% on pcp4 +7% on pcp4, 5 +2% on pcp4, 5 1 Revenue (i
Slide 3: FY 2023 Highlights
FY 2023 Highlights Strong performance continues across all business units (cont.) Organic growth of volumes continues across the business Our primary sectors in the market, infrastructure and construction have held up strongly in response to the 12 RBA cash rate increases (+4%) since May 2022. Conti
Slide 4: Returns over time
Executing with Excellence Returns over time COG is a diversified financial services business with a focus on acquisitive growth. We have and will continue to invest effectively to derive strong returns for our shareholders by using our industry expertise and knowledge to identify value opportunities
Slide 5: Growth in EPSA and dividends per share
FY 2023 Highlights Growth in EPSA and dividends per share Final dividend declared of 4.7 cps (FY22: 4.8 cps ) Cents per share 1 1 13.94 EPSA Payout ratio of 13.87 -10% 12.55 2 12.01 12.52 12.55 12.83 67.3% (FY22: 62.0% ) 2 EPSA 10.87 8.30 +2% 8.40 7.22 Dividend yield (annualised) 6.1% 3 5.95 5.72 4.
Slide 6: Diversity - A truly national business activity footprint
Executing with Excellence Diversity - A truly national business activity footprint NT 962 Novated Lease Customers 1,394 Salary Packaging Customers QLD 76 Broker firms 242 Brokers 605 Novated Lease Customers WA 1,292 Salary Packaging Customers 31 Broker firms 65 Brokers SA 2,634 Novated Lease 7 Broke
Slide 7: Summary of Group financial results
Executing with Excellence Summary of Group financial results Revenue growth of $40.2m includes organic growth (+$33.1m) FY23 1 FY22 1 Pcp and contribution from acquisitions (+$23.1m), partially offset by the $m $m Change pass-through of brokerage revenue (at 100%) to some COG Revenue2 363.2 323.0 12
Slide 8: Underlying NPATA to Shareholders
Executing with Excellence Underlying NPATA to Shareholders +7% In $ millions Government subsidies +5.2% $0.1 +11.6% +6.4% 8
Slide 9: Underlying NPATA to Shareholders by segment
Executing with Excellence Underlying NPATA to Shareholders by segment In $ millions FY23 FY22 NPATA to NPATA to shareholders shareholders (-) Less before (-) Less before NPATA to government government NPATA to government government Segment shareholders subsidies 1 subsidies shareholders subsidies1 s
Slide 10: Segment performance
Segment performance Finance Broking & Aggregation and Funds Management & Lending segments continued to report strong profit growth in FY23 10
Slide 11: Australia's largest asset finance broker and aggregator
Australia’s largest asset Finance Broking & Aggregation 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 Fi
Slide 12: Finance Broking & Aggregation
Finance Broking & Aggregation Record volumes in the face of a higher interest rate environment +15% vs PCP and tight supply $ millions $7.7bn net assets financed 3,405 4,274 in FY 2023 2,154 2,917 2,198 1,604 1,720 2H 1,403 3,284 3,404 2,041 2,365 2,242 1H 1,344 1,524 1,631 2016 2017 2018 2019 2020
Slide 13: Organic growth continues despite a higher interest rate environment
Revenue growth of $33.0m includes organic growth Finance Broking & Aggregation (+$23.5m) with strong performance from the novated lease business and contribution from acquisitions Organic growth continues (+$14.1m), partially offset by the pass-through of brokerage revenue (at 100%) to some COG Aggr
Slide 14: Novated Leasing and Salary Packaging have momentum
Novated Leasing Novated Leasing and Salary Packaging have momentum • In April 2023 via its novated leasing subsidiary business, FleetNetwork, COG acquired Paywise, a salary packaging business. • COG simultaneously divested an 18% interest in the consolidated FleetNetwork business (which includes Pay
Slide 15: Growing and driving a more significant contribution
Funds Management & Lending Growing and driving a more significant contribution 1 Revenue growth of $15.0m includes organic growth of $9.6m FY23 2 FY22 2 Pcp and contribution from Equity-One acquisition of $9.0m4. This $m $m Change growth was partially offset by a decrease in government grants ($0.2m
Slide 16: EBITDA to shareholders
Funds Management & Lending Funds management Equity-One Mortgage Fund Limited has provided significant EBITDA to shareholders contribution in the financial year (+$3.2m EBITDA to shareholders). Funds under management & Lending of $763.4m are up 19% on this time last year, following the acquisition of
Slide 17: Lending book concentrated on asset backed contracts
Lending book Funds Management & Lending • The present value (PV) of the total lending book ($227.9m1) includes COG’s 100% owned subsidiary TL Commercial Finance’s Lending book concentrated legacy portfolio of $10.7m ($7.9m of lease receivables, including unguaranteed residuals, and $2.8m of chattel
Slide 18: Divestment of non-core HAL Group IT business executed in the 1H23
Other Divestment of non-core HAL Group IT business executed in the 1H23 Segment includes COG head office expenses, Hal Group IT business (now divested) and the investment 1 1 FY23 FY22 Pcp in Earlypay Limited (ASX: EPY) $m $m Change Revenue contraction of $7.8m includes the sale of the Hal Revenue 2
Slide 19: Board of Directors 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 year ended 30 June 2023, the Board declared a final dividend of 4.7 cents per and strong cash position fully paid ordinary share (FY22: 4.8 cents per fully paid ordinary share). The total dividend of $9.0m will be paid on 2
Slide 21: Capital management
Capital management Capital raising • On 5 April 2023, Fleet Network Pty Limited (Fleet Network) (an entity that was a 95.2% owned • On 18 April 2023 the Company issued 1,205,196 fully paid ordinary shares totalling $1.66m as subsidiary of Platform) acquired 100% of the shares in Howjack Holdings Pty
Slide 22: 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 23: Appendices
Appendices 23
Slide 24: Statutory income statement
Appendices Statutory income statement Impairment in FY23 relates to the write down of COG’s investment in the associate Earlypay Limited (FY22: relates to the write down of $0.1m in corporate bonds FY23 FY22 Pcp and write off of $0.5m in trail commission receivables $m $m Change due to a financier c
Slide 25: Reconciliation between statutory NPAT and underlying NPATA
Appendices Reconciliation between statutory NPAT and underlying NPATA Members and NCI 1 Members FY23 FY22 Variance FY23 FY22 Variance $m $m $m $m $m $m NPAT 18.0 28.6 (10.6) 8.1 19.7 (11.6) Adjustments (after tax): Impairment 9.8 0.6 9.2 9.8 0.6 9.2 One-off unguaranteed residual rights recognition -
Slide 26: Consolidated statement of financial position
Appendices Consolidated statement of financial position As at 30 Jun 30 Jun $m 2023 2022 Cash and cash equivalents increased by $25.7m mainly due cash held by Cash and cash equivalents 101.8 76.1 the acquired entities Chevron and Paywise. Trade and other receivables 22.4 18.9 Contract assets 2.9 2.9
Slide 27: Consolidated statement of cash flows
Appendices Consolidated statement of cash flows FY23 FY22 1 $m $m Receipts from customers 386.6 346.6 Net cash inflow from operating activities includes $25.6m Payments to suppliers and employees (332.6) (292.6) (FY22: $21.2m) relating to the lease and loan products offered Dividends received 0.6 1.
Slide 28: 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 29: Acquisition history (continued)
Appendices Acquisition history (continued) Interest Date Company Activity Acquirer acquired Price Consideration Jul-20 Westlawn Finance SME finance provider, insurance broking and funds management COG 19.0% $7.5m 100% cash Jul-20 PCG Acquisition of minority interests COG 0.2% $- 100% cash Aug-20 Her
Slide 30: 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 35.1 (22.5) 12.6 8.3 QPF Group 7.0 - 7.0 3.6 Linx Group 3.6 - 3.6 1.8 Westlawn Group 3
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