The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from CNW Group

The Cash Store Australia Holdings Inc. reports results for the three and six months ended December 31, 2012

Wednesday, February 27, 2013

The Cash Store Australia Holdings Inc. reports results for the three and six months ended December 31, 201217:00 EST Wednesday, February 27, 2013EDMONTON, Feb. 27, 2013 /CNW/ - The Cash Store Australia Holdings Inc. ("Cash Store Australia" or the "Company") (TSXV: AUC) today announced results for the three and six months ended December 31, 2012.The decline in revenue continued in the second quarter as a result of the Company's decision to cease brokering loans from March 17, 2012 to April 14, 2012. Also during this period the sale of a key income producing product was put on hold until a complete review of its key features is undertaken.  This review has now been completed.  As a result of this action taken by the Company, a significant number of customers went elsewhere for their financial servicing needs and have not yet returned to do business with Cash Store Australia. The Company plans to introduce new loan products on March 1, 2013 and a newly designed insurance product shortly thereafter.  These product offerings are expected to help draw former customers back to Cash Store Australia's branches. The new products extend the loan term, increase the amount loaned and increase the number of payments required to repay the loan amount.To partially counteract the effect of the ensuing periods of the reduction in revenue, the Company reduced branch operating expenses by $1.1 million in the second quarter and by $1.8 million for the six months ended December 31, 2012 compared to the same periods last year. The Company will continue to monitor the performance of its existing branch base, merge or close those branches that do not meet its performance criteria and closely manage creditor relationships to ensure access to capital is maintained.The Company made significant improvements in the quarter ended December 31, 2012 over the quarter ended September 30, 2012. The net loss for the quarter ended December 31, 2012 improved to $2.1 million from $2.9 million for the quarter ended September 30, 2012. The Company also made significant improvements in the six months ended December 31, 2012 over the six months ended June 30, 2012. The net loss for the six months ended December 31, 2012 improved to $5.0 million from $8.4 million for the six months ended June 30, 2012.Highlights for the second quarter:Revenue of $2.1 million compared to $5.0 million for the same quarter last year.Net loss of ($2.1 million) compared to a net loss of ($1.5 million) in the second quarter of fiscal 2012.Branch operating expenses reduced by $1.1 million in this quarter compared to the same quarter last year.Diluted loss per share of ($0.13) compared to a diluted loss per share of ($0.09) in the same quarter last year.Negative Adjusted EBITDA of ($1.8 million) compared to negative Adjusted EBITDA of ($1.1 million) in the same quarter last year.Highlights for the six months ended December 31, 2012:Revenue of $3.9 million compared to $9.7 million for the same period last year.Net loss of ($5.0 million) compared to a net loss of ($3.0 million) in the six months ended December 31, 2011.Branch operating expenses reduced by $1.8 million in this period compared to the same period last year.Diluted loss per share of ($0.31) compared to a diluted loss per share of ($0.18) in the same six month period last year.Negative Adjusted EBITDA of ($4.6 million) compared to negative Adjusted EBITDA of ($2.1 million) in the same six month period last year.About Cash Store AustraliaCash Store Australia is the only small sum short term advance broker in Australia publicly traded on the TSX Venture Exchange (TSXV:AUC). Cash Store Australia operates 67 branches in the States of Victoria, Queensland, Tasmania, Northern Territory, and New South Wales Australia under the banner "The Cash Store".Summary Financial Information    Three Months Ended     Six Months EndedConsolidated results  December 31 December 31 December 31 December 31(presented in Canadian dollars)  2012 2011 2012 2011  No. of branches 67 81 67 81          Revenue          Brokerage  $2,008,298  $4,476,714 $3,672,715  $8,641,387 Other income  103,272  493,275 205,636  1,024,432Total Revenue  2,111,570  4,969,989 3,878,351  9,665,819Branch Expenses          Salaries and benefits  1,563,155  2,424,900 3,196,370  4,791,895 Retention payments  96,967  1,249,920 564,487  2,296,813 Rent  554,545  652,180 1,118,452  1,297,082 Selling, general, and administrative  345,714  510,474 658,662  1,015,735 Advertising and promotion  173,447  165,252 402,695  272,972 Depreciation of property and equipment  49,007  153,312 99,377  323,408   2,782,835  5,156,038 6,040,043  9,997,905Branch Operating Income (Loss)  (671,265) (186,049) (2,161,692) (332,086)            Regional expenses  212,669  398,803 400,083  742,459 Corporate expenses  1,122,265  785,961 2,221,982  1,458,417 Other depreciation and amortization  8,039  12,002 16,508  27,678 Impairment of property and equipment  98,087  148,797 111,985  449,592 Restructuring costs  (52,271) - (45,428) - Interest expense  90,148  - 140,048  - Foreign exchange loss (gain)  (15,766) (49,104) 32,822  12,039 EBITDA*  (1,987,242) (1,317,194) (4,783,759) (2,671,186) Adjusted EBITDA*  (1,846,660) (1,103,413) (4,586,255) (2,094,958)Net loss  $(2,134,436) $(1,482,508) $(5,039,692) $(3,022,271)Weighted average number of shares          outstanding - basic  16,425,981 16,425,981 16,425,981 16,425,981Basic and Diluted loss per share          Net loss  $(0.13) $(0.09) $(0.31) $(0.18)          Consolidated Balance Sheet Information         Working capital  $(20,039,973) $(8,140,567) $(20,039,973) $(8,140,567)Total assets  2,231,440  3,517,981 2,231,440  3,517,981Total long-term liabilities  80,181  177,188 80,181  177,188Total liabilities  21,667,192  9,743,258 21,667,192  9,743,258Shareholders' equity  $(19,435,752) $(6,225,277) $(19,435,752) $(6,225,277)* EBITDA - earnings before interest, income taxes, depreciation of property and equipment and amortization of intangible assets.  Adjusted EBITDA - earnings before interest, income taxes, depreciation of property and equipment and amortization of intangible assets, stock-based compensation and impairment of property and equipment. Forward Looking Information This News Release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to our objectives, strategies, operations and financial results. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved.  Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Cash Store Australia, to be materially different from those expressed or implied by such forward-looking information. All material assumptions used in making forward-looking statements are based on management's knowledge of current business conditions and expectations of future business conditions and trends. Although we believe the assumptions used to make such statements are reasonable at this time and have attempted to identify in our continuous disclosure documents important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Certain material factors or assumptions are applied by us in making forward-looking statements, include without limitation, factors and assumptions regarding our continued ability to fund our small sum short term loan business, rates of customer defaults, relationships with, and payments to, third party lenders, demand for our products, as well as our operating cost structure and current consumer protection regulations. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. We do not undertake to update any forward-looking information, except in accordance with applicable securities laws.Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.  SOURCE: The Cash Store Australia Holdings Inc.For further information: For further information on Cash Store Australia, please contact: Bill Johnson, Chief Financial Officer (780) 732-5695; e-mail: b.johnson@csfinancial.ca