Please see attached the Proxy Summary from the 2011 AGM for:
Election of a Director - Mr William Love
Election of a Director - Mr Joseph Beale
Transfer of Listing Category
Further to the announcement released to ASX and LSE by Cash Converters International Limited (“CCIL”) on 6 October 2011 announcing that the resolution to complete CCIL’s migration from its listing on the Premium segment of the Official List of the UKLA to the Standard segment (the “Migration”) was approved, we are pleased to announce that the Migration has been successfully completed.
The directors of Cash Converters International Limited (‘Cash Converters’) are pleased to report a record profit result of $27.6 million for the 2011 financial year, an increase of 27.5% over the previous year.
...This result is particularly pleasing considering the impact of the Queensland floods which severely damaged our corporately owned store located in Goodna. Write-offs to inventory and fixtures and fittings, combined with damage to customers’ pawned goods and the prolonged store closure have all had a negative profit impact, resulting in a loss against budget of approximately $1.5 million. The insurance company has refused to honour our claim in respect
to damages and losses incurred pursuant to the flood. Cash Converters intend to challenge this decision. The store has been re-fitted and was re-opened in July. Partially compensating the above losses is a one-off gain of approximately $1.2 million relating to a reduction in contingent consideration associated with the acquisition of the Goodna store.
The Group has also incurred the following unbudgeted, one-off costs, during the financial year:
Professional fees associated with the unwinding of the Dividend Access Scheme and the issue of a catch up prospectus in relation to Cash Converter’s London Stock Exchange listing, required by the United Kingdom Listing Authority (“UKLA”), amounted to approximately $800,000 in fees which were charged to the income statement; and Professional fees associated with the transaction with the EZCORP alliance announced to the ASX on 22 March 2011 have resulted in a charge to the income statement of approximately $500,000.
In total these unbudgeted one-off items have had an approximate $1.6 million negative impact on the 30 June 2011 profit before tax. Other than the gain noted above there were no unbudgeted or one-off revenue streams.
In addition to the above costs the income statement included the following additional costs not previously incurred:
The Long Term Incentive plan approved at the last Annual General Meeting as part of the remuneration package for the Managing Director has resulted in an expense of approximately $700,000;
An expense of approximately $460,000 in relation to stamp duty on acquisitions;
Amortisation of re-acquired rights and customer relationships of $444,700; and
An expense of approximately $700,000 in relation to a GST adjustment (Division 135) related to prior year store acquisitions.
$27.6 million for the 2011 financial year, an increase of 27.5% over the previous year.
Please see the full 2011 Annual Report Attached [PDF].
Cash Converters International Limited ("Cash Converters") (ASX: CCV; LSE: CCVU) intends to put in place arrangements in the UK to facilitate trading in Cash Converters ordinary shares ("Cash Converters Shares") on the London Stock Exchange ("LSE") by enabling electronic settlement through CREST.
Cash Converters International Limited is pleased to announce that EZCORP, Inc through its wholly owned subsidiary CCV Virginia, Inc has acquired from Cash Converters United LC (“CC United”) its rights as sub-franchisor to the Cash Converters brand and name in several states in the USA.
Annual General Meeting of Cash Converters International Limited.
To be held at the Western Australian Club, 101 St Georges Tce Perth WA 6000
Wednesday 16th November 2011, commencing at 10.00am WST
Cash Converters International Limited is pleased to report that, following a series of representations from both the Company and over 30,000 of our customers, the Australian Government's proposals for a cap on fees and charges for micro-lending, as set out in the Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011, were referred by Parliament, on 22 September 2011, to both the Senate Economics Committee and to the Joint Committee on Corporations and Financial Services.
The consolidated entity’s net profit attributable to members of the parent entity for the year ended 30 June 2011 was $27,634,929
(2010: $21,629,922) after a charge for income tax of $11,578,126 (2010: $9,536,414), and adjusting for profit attributable to Noncontrolling interests in controlled entities of $Nil (2010: $46,241 profit).
To see the full report click here.
Cash Converters International Limited (ASX: CCV) (LSE: CCVU) (Cash Converters) advises that EZCORP has elected to terminate the Transaction Implementation Agreement announced on 22nd March, 2011. Accordingly, the proposed Scheme pursuant to which EZCORP would make an offer to shareholders to acquire further shares in Cash Converters, and the associated proposal for the parties to enter into certain Joint Ventures, have been cancelled. EZCORP has taken this decision in light of the announcement by the Australian Federal Government on 24th August, 2011 that it intends to amend the National Consumer Credit Protection Act and seek to introduce strict caps on fees and charges for micro-lenders. Although the amendments have not yet been passed, as currently proposed those limitations could have a material impact on Cash Converters’ consumer loan business in Australia. Accordingly, EZCORP is not willing to proceed with the transaction.
EZCORP has indicated that, as the major shareholder in Cash Converters, it remains committed to its investment and to the strategic importance of the global brand that Cash Converters is building. Paul Rothamel, EZCORP’s President and Chief Executive Officer, stated: “We still have a significant investment in Cash Converters — we remain a 33% shareholder and we own the master franchise rights for the Cash Converters business in Canada. Consequently, we are very interested in, and committed to, Cash Converters’ long-term success and look forward to finding other ways to proactively work with the Cash Converters team to achieve that success and maximize the long-term value for all Cash Converters shareholders.”
Outlook and opportunities
The Board of Cash Converters remains confident of achieving market expectations for the year ending 30 June, 2012. The proposed reforms will have no impact on the business and earnings of the company during this financial year as they are intended to be effective from 1 July, 2012 at the earliest.
Cash Converters has a number of strategies available to mitigate the negative impact that may be caused by the reforms in Australia. To preserve the profitability of the Australian store network, Cash Converters can focus on other products and services which may provide an alternative solution for some of the financial needs of customers. Cash Converters will also consider directing additional resources into the United Kingdom where it has a 200 store chain (including 47 corporate owned stores) where its financial services products are experiencing exceptional growth and there is currently no cap on fees and charges.
Cash Converters continues to lobby the Government concerning the merits of the proposed legislative changes which, amongst other things, may leave many thousands of consumers who do not have access to credit from banks without any available credit from regulated and reputable lenders such as Cash Converters. Already within three business days of the Government’s announcement, over 14,000 customers have joined Cash Converters’ in-store campaign to send their personal protest to the Minister for Financial Services. Our customers are concerned about the possibility of restricted access to short term credit that may result from the proposed amendments causing credit providers to withdraw funds from this segment of the market.
Cash Converters International Limited (“CCV”) were advised that the Federal Government released Exposure Drafts on 25 August 2011 in relation to the National Consumer Credit Protection Amendment (Enhancements) Bill 2011.
In summary, the Exposure Drafts propose reforms to:
• cap fees and charges for consumer loans with different caps applying to “small amount credit contracts” (in summary, loans of $2,000 or less where the term is two years or less) and other loans;
• for small amount loans, the proposed cap comprises an establishment fee of 10%, a monthly fee of 2% and default fees limited to the initial loan amount; for other loans, there is a annual cost rate of 48%;
• the timing of the implementation of these reforms has yet to be decided and the exact nature of these reforms is yet to be determined; further adjustments may be made in light of industry submissions which are required to be lodged by 4th September, 2011.
Impact on CCV
CCV is studying the reforms and will participate in the industry consultation process. The impact of such caps on the business model of CCV will have to be determined once the terms have been finalised.
25 August 2011