Fsa Group Limited · ASX:FSA
Fsa — Investor Presentation (September 2009)
24 slides from Fsa's investor presentation, Sep 7, 2009
Slide 1: Investor Presentation and FY2010 Profit Guidance
For personal use only Investor Presentation and FY2010 Profit Guidance September 2009
Slide 2: Key investment highlights
Key investment highlights For personal use only 1. FSA is a leader in Australian debt solutions for individuals 2. Market for debt solutions is significant and growing 3. Established track record in lending which delivers secure, annuity income 4. Business performs irrespective of economic cycles 5.
Slide 3: Overview of FSA
Overview of FSA For personal use only CONSUMER DEBT MARKET • Founded in 2000, listed in 2002 • FSA is the largest provider of debt solutions to individuals in PERFORMING DEBTORS Australia • $227m* funding in place with Westpac for lending • Substantial shareholdings by founding directors & key DISTR
Slide 4: FSA's core competencies
FSA’s core competencies Managers of risk For personal use only • Direct client acquisition model • Controlled, selective and low cost • Clients are “micro‐managed” efficiently • Understand and assess debtor and creditor clients’ needs • Tailor solutions which are affordable, sustainable and viable •
Slide 5: FSA's integrated business model
FSA’s integrated business model Overview of products and services For personal use only For 60% • Informal Arrangement clients • Debt Agreement (DA) with • Personal Insolvency property Agreement (PIA) 40% • Bankruptcy • Other solutions FSA Group – Investor Presentation September 2009 5
Slide 6: What drives demand?
What drives demand? Levels of debt and ability to service For personal use only Credit Card Debt 2002 – 2009 $ bn Debt to Disposable Income % $ bn % Source: RBA Source: RBA FSA Group – Investor Presentation September 2009 6
Slide 7: Services
Services High volume, fee for service income For personal use only • Largest provider of DAs ‐ 54% market share • “Micro manages” over $170m of unsecured debt on behalf of institutional creditors • One of the largest registered trustees ‐ PIAs and Bankruptcies • Fee for service income • Informal Arr
Slide 8: FSA is the leader in debt agreements
FSA is the leader in debt agreements For personal use only Targeting over 60% of DA Market 2010-2013 • Barriers to entry are high • DAs are volume dependent • 2008 fee regime changed from upfront to deferred – operators need to be well capitalised Large number of competitors attracted to the sector
Slide 9: Irrespective of the cycle, market for FSA's services is growing
Irrespective of the cycle, market for FSA’s services is growing For personal use only Number of cases Individual Insolvency Market The number of DAs are expected to grow, even if the market for insolvencies remains static…Why? DAs are preferred outcome for all stakeholders • Individuals ‐ Many enter
Slide 10: Home Loan Broking & Lending
Home Loan Broking & Lending For personal use only For 60% • Informal Arrangement clients • Debt Agreement (DA) with • Personal Insolvency property Agreement (PIA) 40% • Bankruptcy • Other solutions FSA Group – Investor Presentation September 2009 10
Slide 11: Non-Conforming Home Loan Market – 2007
NonConforming Home Loan Market – 2007 Historically has attracted competition For personal use only Home Loan Market >$200bn p.a. Non- 2007 – Market saturation 2007 Conforming Lending Market • “TRUE” non‐conforming ‐ $2bn to $4bn p.a. estimated • Large number of competitors with • High volume/ low m
Slide 12: Non-Conforming Home Loan Market – 2009
NonConforming Home Loan Market – 2009 Fewer competitors, but market is growing For personal use only Home Loan Market 2009 – Market wide open >$200bn • GFC has created PENT UP demand p.a. • High levels of consumer debt • Less availability of credit • Stricter lending criteria by banks Non- • Large
Slide 13: FSA is leveraging core competency & track record to grow annuity income
FSA is leveraging core competency & track record to grow annuity income For personal use only • 100% non‐conforming home • Secured $210m non‐recourse loan broking business facility from Westpac • Largest non‐conforming • Extension to existing model broker in Australia • Assist more clients and • >$2
Slide 14: FSA's established track record in lending
FSA’s established track record in lending Underpins future funding For personal use only Competitors • Low over 30 day arrears ~ 5% (competitors ~15%) • High proportion of income verified “Full Doc” borrowers ~ 94% (competitors ~35%) • Low LVR : weighted average ~67% FSA (competitors ~74%) FSA Group
Slide 15: Financial Performance – Revenue
Financial Performance Revenue For personal use only $60m CAGR 2004 – 2009 = 30% 50.8 $50m $40m 36.3 33.6 $30m 21.8 $20m 13.9 14.2 $10m $0m 2004 2005 2006 2007 2008 2009 FSA Group – Investor Presentation September 2009 15
Slide 16: Financial Performance – Profit before Tax
Financial Performance Profit before Tax For personal use only $20m CAGR 2004 – 2009 = 54% $15m 14.0 9.7 $10m 4.1 4.7 $5m 1.6 1.7 $0m 2004 2005 2006 2007 2008 2009 Commenced Home Loan Lending – shift from upfront revenue (as Broker) to deferred revenue (as Lender). Once off downward pressure on profi
Slide 17: Earnings Guidance
Earnings Guidance Profit Before Tax FY2010 For personal use only $20m CAGR 2004 – 2010 = 48% 14.5 – 19.0 $15m 14.0 9.7 $10m 4.7 $5m 4.1 1.6 1.7 $0m 2004 2005 2006 2007 2008 2009 2010 Guidance FY2010 Profit Guidance of $14.5m to $19m FY2008 Commenced Home Loan Lending – shift from upfront revenue (
Slide 18: Financial Breakdown FY2009/FY2010 Guidance
Financial Breakdown FY2009/FY2010 Guidance For personal use only FY2009 FY2010 Actual Guidance Services 10.3m 8m-12m Home Loan Lending 3.1m 5.5m-6m 22% 34% Other 0.6m 1m Average loan pool Assumes average loan size of $125m pool size of $175m Profit before Tax 14.0m 14.5m-19m Profit after Tax 8.8m 9m
Slide 19: FY2010 to 2013 Growth strategies
FY2010 to 2013 Growth strategies For personal use only • Leveraging existing business model • PBT compounding growth in Services* of around 15% per annum • Grow Home Loan Lending pool from $150m (start of FY2010) to ~$600m (end of FY2013) • Continue to add ‘bolt on’ products to drive growth at minim
Slide 20: Loan pool to grow from $150m to $600m
FY2010 to 2013 Loan pool to grow from $150m to $600m For personal use only Source additional funding, expand product range to 60% 20% include near prime, grow volumes. 40% 80% Expand lending to 80% Percentages refer to client numbers of business FSA Group – Investor Presentation September 2009 20
Slide 21: Key investment highlights
Key investment highlights For personal use only 1. FSA is a leader in Australian debt solutions for individuals 2. Market for debt solutions is significant and growing 3. Established track record in lending which delivers secure, annuity income 4. Business performs irrespective of economic cycles 5.
Slide 22: Investor Relations Contact
Investor Relations Contact For personal use only Mr. Tim Odillo Maher Mr. Duncan Cornish Executive Director Secretary FSA Group Limited FSA Group Limited Level 3, 70 Phillip Street Level 5, 10 Market Street Sydney NSW 2000 Brisbane QLD 4000 T 02 9293 6054 T 07 3212 6299 F 02 9293 6032 F 07 3212 6250
Slide 23: 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 August 2009. It is information in summary form and does not purport to be complete.
Slide 24: Investor Presentation and FY2010 Profit Guidance
For personal use only Investor Presentation and FY2010 Profit Guidance September 2009