Dealnet Reports 2019 Financial Results - Seite 2

2019 Financial Highlights

Originations and Portfolio Growth

Annual originations in 2019 increased by 36% to $60.4 million compared to $44.4 million in 2018. The Company started 2019 with net portfolio of finance receivables of $182.8 million with over 35,000 contracts in place and ended the year at $201.7 million and over 38,000 contracts.

Net Interest Margin

Net interest margin increased by 11% to $2.1 million in the fourth quarter (9.0% yield) from $1.9 million (8.7% yield) for the same quarter last year. For the year ended December 2019, net interest margin increased to $7.8 million (9.0% yield) from $7.5 million (8.8% yield) in the prior year.

Fee Revenue

Fee and ancillary revenue was $1,107 thousand for the fourth quarter of 2019 compared to $574 thousand in the fourth quarter of 2018. For 2019, fee revenue was $3,054 thousand compared to $2,224 thousand in the prior year.

Portfolio Performance

The aging profile of the finance receivable portfolio improved meaningfully over comparative periods. Overall delinquency rates dropped to 4.3% as at December 31, 2019 as compared to 4.6% in the prior quarter and 5.8% in the same quarter in 2018.  The primary driver of this decline was in the less than 90 days bucket which fell to 1.0% as compared to 2.0% as at December 31, 2018.

Provision for credit losses was $1.27 million in 2019 ($0.45 million in 2018). The provision recognized in 2019 was a combination of an increase to the underlying provision for future credit losses and actual realized credit losses. The increased credit loss provision was driven by a more refined analysis of the portfolio and the underlying assumptions used to determine expected losses based on actual historical portfolio performance, along with changes to the underlying variables and methodology used for stress testing the portfolio for changes to macroeconomic factors. The allowance for credit losses recognized on the balance sheet as a percentage of finance receivables is 1.05% (0.95% in 2018).

Call Centre Performance

Call Centre gross margin was $1,002 thousand (37%) for the fourth quarter of 2019, as compared to $625 thousand (27%) in the fourth quarter of 2018. Gross margin for the year ended 2019 was $3,395 thousand (36%) compared to $2,852 thousand (28%) for the prior year.

Operating Expenses

Salaries, wages and benefits together with general and administrative expenses totaled $2.8 million, an improvement of 7% compared to the $3.0 million recorded in the prior quarter and in line with the $2.8 million recorded in same quarter last year. For the year ended 2019, overheads totaled $11.8 million, an improvement of 15% compared to the $13.9 million recorded in the prior year.