Cash Converters International Limited is pleased to announce that it has entered into a Sale Agreement to purchase eight Cash Converters stores in Victoria from the Hosking Financial Group (HFG). It is expected that completion of this acquisition will occur as soon as the various landlords of the stores have consented to the assignment of the leases.
The purchase price is $12.5 million and this will be funded from cash reserves and bank borrowing. No shares will be issued in connection with this acquisition. The price includes the loan book (approximately $2.2 million), stock (approximately $1.5 million), plant and equipment and fixtures and fittings (approximately $1.3 million) and all other assets employed in the businesses. The price is based upon a historical EBIT for the stores, for the financial year to 30 June 2007 of $3 million as verified by audit. The Company will incur additional costs going forward of approximately $600,000 per annum associated with maintaining the HFG head office and existing management team. These costs will be diluted as we add store numbers to the network.
Upon completion of this transaction, the Company will own 20 corporate stores - 11 in the United Kingdom and nine in Australia. This acquisition is a vital step towards the expansion of the corporate store network, a program which the Company is now firmly committed to. This will be achieved by a combination of both new store openings and the acquisition of existing stores from franchisees. The eight store network in Victoria together with its existing management team will form the core of our Australian corporate store network.
Each Company store in Australia will contribute to the collective advertising fund and pay training levies and IT fees on the same basis as every franchise store.
This acquisition is a strong vote of confidence by the Company in the future prospects of the Cash Converters store business model.
Financial year ended 30 June 2007:
- Revenues from ordinary activities up 103.2% to $45,979,982;
- Profit from ordinary activities after tax up 173.0% to $11,631,146;
- Net profit attributable to members up by 174.4% to $11,557,840;
- The directors of the Company paid a fully franked interim dividend
of 1.5 (one and a half) cents per share on 30 March 2007. The directors have also
declared a final fully franked dividend of 1.5 (one and a half) cents per share to be
paid on 28 September 2007 to those shareholders on the register at the
close of business on 14 September 2007.
Please see the attached PDF for details.
CCIL announces that its UK subsidiary has acquired five existing Cash Converters stores in and around Leeds. The stores have been bought as going concerns for a total consideration of £1.6 million ($3.8 million) including assets. The stores are expected to produce EBIT of £0.350 ($0.840) in the coming financial year and have considerable growth potential as two of the five stores have only recently been opened. The addition of these stores to the existing corporate store chain of six stores will create economies of scale and efficiencies and enable the company to accelerate the growth of the corporate store chain in the UK. This acquisition will also give a boost to the progress of the CC UK online auction site. Having 11 corporate stores dedicated to the development of the e-commerce website will ensure its continued growth.
The acquisition will be funded by a combination of borrowings and available cash resources and without the issue of any shares.
Cash Converters International Limited (“CCIL”) is pleased to announce the appointment of Mr Cameron Hetherington as a non-executive director of the Company with immediate effect.
Mr Hetherington is a 43 year old Australian residing in Queensland. His appointment will add significant skills and experience to the Board of CCIL as it pursues an aggressive corporate store growth strategy by way of the acquisition of existing franchise stores and the opening of new stores.
In 1993 Mr Hetherington joined Dollar Financial Corporation, a NASDAQ listed company specialising in the provision of retail financial services such as pay day advances and unsecured loans.
He served in a variety of senior management positions, most recently as the group’s Senior Vice President-International Operations since September 2004. Prior to this he served as Dollar’s Senior Vice President and President-U.K. Operations, as well as Managing Director of Dollar Financial U.K. Limited from March 1999 to September 2004, with responsibility for management and strategic development of the UK and European markets.
Under his stewardship, the UK operation grew aggressively through eight major acquisitions and more than 40 new store developments, expanding the operations to 152 company owned and 350 franchise/agent locations.
Before embarking on a career in commerce, from 1983 to 1992 Mr Hetherington served as a commissioned officer within the Australian Defence Force in a variety of operational, training and administrative roles both domestically and overseas, culminating in the position of Regimental Adjutant for the Royal Australian Regiment and Australian Infantry Corps.
Mr Hetherington resigned from Dollar Financial to return to Australia with his wife and children for family reasons and to pursue a corporate consultancy role.