UPDATE 1.15pm: Shares in Cash Converters surged after the company reported improved first quarter performance on the back of growth in its UK operations, a stabilisation in bad debts and strong take-up of its online offering in Australia.
The short term and emergency cash lender said first quarter EBIT was up 43.3 per cent on the previous corresponding period to $14.2 million.
"This result has been driven by the continued strong performance of the personal loan books," the company said in a statement.
"In particular the UK loan book has grown by 146.1 per cent on the previous corresponding period to £15.3 million ($23.4 million).
"This strong performance has driven an increase in the UK EBIT contribution by 155.4 per cent over the previous corresponding period."
Cash Converters also said its mature Australian personal loan book was continuing to grow strongly with the loan book reaching $67.1 million as at September 30, an increase of 32.7 per cent on the previous corresponding period.
"It is also pleasing that the bad debt levels have stabilised in the UK while the profitability of the UK loan book has increased strongly as the loan balance has increased."
The company said its Australian personal loan book bad debt levels were in line with historical levels.
Cash Converters said its online platform was now achieving sales in the order of $250,000 per month in Australia.
During the quarter, additional stores were acquired in Wigan and Gloucester in the UK, taking total corporate owned stores in the UK to 61 and total stores in the UK to 222 including franchised stores.
In Australia, the Company opened two new corporate stores in Port Kennedy (WA) and Bankstown (NSW) taking total corporate owned stores in Australia to 44 and total store numbers in Australia to 147.
Cash Converters managing director Peter Cumins said the September quarter was exceptionally strong and had exceeded expectations.
"Particularly pleasing, but not surprising, is the growth we have achieved in the UK as our efforts and focus on corporate store acquisitions and growing the personal loan book is beginning to contribute strongly to our earnings," he said.Cash Converters shares closed up seven cents, or 7.78 per cent, at 97 cents after hitting an intraday peak of $1.002.
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