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goeasy Ltd. Reports Record Results for the Second Quarter

goeasy Ltd.
goeasy Ltd.

Loan Originations of $667 million, up 6% from $628 million
Loan Portfolio of $3.20 billion, up 35% from $2.37 billion
Revenue of $303 million, up 20% from $252 million
Net Charge Off Rate of 9.1%, down from 9.3%
Diluted EPS of $3.26, up 41%; Adjusted Diluted EPS1 of $3.28, up 16% from $2.83

MISSISSAUGA, Ontario, Aug. 09, 2023 (GLOBE NEWSWIRE) -- goeasy Ltd. (TSX: GSY), (“goeasy” or the “Company”), one of Canada’s leading non-prime consumer lenders, today reported results for the second quarter ended June 30, 2023.

Second Quarter Results

During the quarter, the Company produced record loan originations of $667 million, up 6% compared to $628 million originated in the second quarter of 2022. The increase in lending was driven by strong demand, leading to a record volume of applications for credit, which were up 25% over the prior year. The Company experienced strong performance across its entire range of products and acquisition channels, including unsecured lending, point-of-sale lending, and automotive financing.

ANNUNCIO PUBBLICITARIO

The increased loan originations led to growth in the loan portfolio of $210 million, above the Company’s forecasted range of between $175 million and $200 million. At quarter end, the consumer loan portfolio was a record $3.20 billion, up 35% from $2.37 billion in the second quarter of 2022. The growth in consumer loans led to an increase in revenue, which was a record $303 million in the quarter, up 20% from $252 million in the second quarter of last year.

During the quarter, the Company continued to experience stable credit and payment performance. The net charge off rate in the second quarter was 9.1%, in line with the Company’s target range of between 8% and 10% on an annualized basis, and 20 bps lower than 9.3% in the second quarter of 2022. The stable credit performance reflects the improved product mix of the loan portfolio and the proactive credit and underwriting enhancements made throughout 2021 and 2022. The Company’s allowance for future credit losses reduced slightly to 7.42%, compared to 7.48% in the first quarter.

Operating income for the second quarter of 2023 was a record $111 million, up 30% from $85 million in the second quarter of 2022. Operating margin for the second quarter was 36.5%, up from 33.8% in the same period last year.

After adjustments, including unusual items and non-recurring expenses, the Company reported record adjusted operating income2 of $114 million, an increase of 29% compared to $89 million in the second quarter of 2022. Adjusted operating margin1 for the second quarter was 37.7%, up from 35.3% in the same period in 2022. The efficiency ratio1 for the second quarter of 2023 was 31.2%, an improvement of 300 bps from 34.2% in the second quarter of 2022, reflecting an increase in operating leverage.

Net income in the second quarter was $55.6 million, up 45% from $38.3 million in the same period of 2022, which resulted in diluted earnings per share of $3.26, up 41% from the $2.32 reported in the second quarter of 2022. After adjusting for non-recurring and unusual items on an after-tax basis in both periods, adjusted net income2 was a record $56.0 million, up 20% from $46.8 million in the second quarter of 2022. Adjusted diluted earnings per share1 was a record $3.28, up 16% from $2.83 in the second quarter of 2022. Return on equity during the quarter was 24.0%, compared to 20.2% in the second quarter of 2022. Adjusted return on equity1 was 24.2% in the quarter, compared to 24.7% in the same period of 2022.

“The second quarter continued to highlight the growth potential of our business model and the strength of our credit performance,” said Jason Mullins, goeasy’s President and Chief Executive Officer, “As market conditions present a challenging environment for many companies within our industry, those with scale are experiencing a net benefit from that disruption. During the quarter we experienced favorable competitive conditions and received a record number of applications for credit, at nearly half a million, which led to a record number of new customers, at nearly 42,000. We now expect to achieve the high end of our loan book forecast for 2023 of $3.6 billion. Furthermore, we continue to produce stable credit performance, with the net charge off rate improving year-over-year by 20 basis points to 9.1%, while our focus on operating leverage resulted in an improvement to our efficiency ratio by 300 basis points compared to last year. All combined, adjusted diluted earnings per share rose 16% in the quarter to a record $3.28,” Mr. Mullins concluded.

Other Key Second Quarter Highlights

easyfinancial

  • Record revenue of $265 million, up 24%

  • 41% of the loan portfolio secured, up from 36%

  • Record volume of applications for credit, up 25%

  • Record new customer volume at 41,928

  • Record 71% of net loan advances1 in the quarter were issued to new customers, up from 65%

  • Average loan book per branch3 improved to a record $5.2 million, an increase of 22%

  • Weighted average interest rate3 on consumer loans of 30.1%, down from 31.7%

  • Record operating income of $125 million, up 31%

  • Operating margin of 47.4%, up from 44.6%

easyhome

  • Revenue of $38.2 million, up 2%

  • Consumer loan portfolio within easyhome stores increased to $96.6 million, up 25%

  • Financial revenue2 from consumer lending increased to $11.6 million, up 17% from $9.9 million

  • Operating income of $9.2 million, up 5%

  • Operating margin of 24.1%, up from 23.3%

Overall

  • 88th consecutive quarter of positive net income

  • 2023 marks the 19th consecutive year of paying dividends and the 9th consecutive year of a dividend increase

  • 53rd consecutive quarter of same store revenue growth

  • Total customers served over 1.3 million

  • Acquired and organically originated over $11.4 billion in loans

  • Adjusted return on equity1 of 24.2%, down slightly from 24.7%

  • Adjusted return on tangible common equity1 of 33.4%, down from 38.0%

  • Fully drawn weighted average cost of borrowing at 5.9%, up from 4.9%

  • Net debt to net capitalization4 of 72% on June 30, 2023, in line with the Company’s target leverage profile

Six Months Results

For the first six months of 2023, the Company funded $1.28 billion in loan originations, up 16% from $1.10 billion in 2022. The consumer loan receivable portfolio finished at $3.20 billion, up 35% from $2.37 billion as of June 30, 2022.

For the first six months of 2023, the Company produced record revenues of $590 million, up 22% compared to $484 million in the same period of 2022. Operating income for the period was a record $213 million compared with $165 million in the first six months of 2022, an increase of $47.6 million or 29%. Adjusted operating income2 for the first six months of 2023 was a record $221 million, 26% higher compared to $175 million in the same period of 2022. Efficiency ratio1 for the first six months of 2023 was 32.1%, an improvement of 280 bps from 34.9% in the same period of 2022.

Net income for the first six months of 2023 was $107 million and diluted earnings per share was $6.27, compared with $64.4 million or $3.86 per share. Adjusted net income2 for the first six months of 2023 was $109 million and adjusted diluted earnings per share1 was $6.39 compared with $92.6 million or $5.55 per share, increases of 18% and 15%, respectively. Reported return on equity was 23.6%, while adjusted return on equity1 was 24.0%, consistent with 24.1% in the same period of 2022.

Balance Sheet and Liquidity

Total assets were $3.68 billion as of June 30, 2023, an increase of 27% from $2.90 billion as of June 30, 2022, primarily driven by growth in the consumer loan portfolio.

During the quarter, the Company extended the maturity of its existing revolving securitization warehouse facility (“Securitization Facility”) from August 30, 2024 to October 31, 2025. The amendment to the $1.4 billion Securitization Facility incorporates key modifications including improved eligibility criteria for consumer loans, as well as pool concentration limits, resulting in increased funding capacity. The lending syndicate for the Securitization Facility continues to consist of Royal Bank of Canada, National Bank Financial Markets and Bank of Montreal, and the facility bears interest on advances payable at the rate of 1-month Canadian Dollar Offered Rate (“CDOR”) plus 195 bps. Based on the current 1-month CDOR rate of 5.37% as of August 4, 2023, the interest rate would be 7.32%. The Company continues utilizing an interest rate swap agreement to generate fixed rate payments on the amounts drawn to assist in mitigating the impact of increases in interest rates.

During the quarter, the Company recognized net investment income of $2.3 million, due to fair value change in the Company’s strategic minority investment in Affirm Holdings Inc. (“Affirm”).

Free cash flow from operations before net growth in gross consumer loans receivable2 in the quarter was $76.5 million, up 34% from $56.9 million in the second quarter of 2022. Based on the cash on hand at the end of the quarter and the borrowing capacity under the Company’s existing revolving credit facilities, the Company had approximately $895 million in total funding capacity as of June 30, 2023. The Company remains confident that the capacity available under its existing funding facilities, and its ability to raise additional debt financing, is sufficient to fund its organic growth forecast.

At quarter-end, the Company’s weighted average cost of borrowing was 5.6%, and the fully drawn weighted average cost of borrowing was 5.9%. The Company estimates that it could currently grow the consumer loan portfolio by approximately $250 million per year solely from internal cash flows, without utilizing external debt. The Company also estimates that once its existing and available sources of debt are fully utilized, it could continue to grow the loan portfolio by approximately $400 million per year solely from internal cash flows. The Company also estimates that if it were to run-off its consumer loan and leasing portfolios, the value of the total cash repayments paid to the Company over the remaining life of its contracts would be approximately $4 billion. If, during such a run-off scenario with reasonable cost reductions, all excess cash flows were applied directly to debt, the Company estimates it would extinguish all external debt within 15 months.

Dividend

The Board of Directors has approved a quarterly dividend of $0.96 per share payable on October 13, 2023 to the holders of common shares of record as at the close of business on September 29, 2023.

Forward-Looking Statements

All figures reported above with respect to outlook are targets established by the Company and are subject to change as plans and business conditions vary. Accordingly, investors are cautioned not to place undue reliance on the foregoing guidance. Actual results may differ materially.

This press release includes forward-looking statements about goeasy, including, but not limited to, its business operations, strategy and expected financial performance and condition. Forward-looking statements include, but are not limited to, statements with respect to forecasts for growth of the consumer loans receivable, annual revenue growth forecasts, strategic initiatives, new product offerings and new delivery channels, anticipated cost savings, planned capital expenditures, anticipated capital requirements and the Company’s ability to secure sufficient capital, liquidity of the Company, plans and references to future operations and results, critical accounting estimates, expected future yields and net charge off rates on loans, the estimated number of new locations to be opened, the dealer relationships, the size and characteristics of the Canadian non-prime lending market and the continued development of the type and size of competitors in the market. In certain cases, forward-looking statements that are predictive in nature, depend upon or refer to future events or conditions, and/or can be identified by the use of words such as “expect”, “continue”, “anticipate”, “intend”, “aim”, “plan”, “believe”, “budget”, “estimate”, “forecast”, “foresee”, “target” or negative versions thereof and similar expressions, and/or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.

Forward-looking statements are based on certain factors and assumptions, including expected growth, results of operations and business prospects and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company’s operations, economic factors and the industry generally. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those expressed or implied by forward-looking statements made by the Company. Some important factors that could cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to, goeasy’s ability to enter into new lease and/or financing agreements, collect on existing lease and/or financing agreements, open new locations on favourable terms, offer products which appeal to customers at a competitive rate, respond to changes in legislation, react to uncertainties related to regulatory action, raise capital under favourable terms, compete, manage the impact of litigation (including shareholder litigation), control costs at all levels of the organization and maintain and enhance the system of internal controls.

The Company cautions that the foregoing list is not exhaustive. These and other factors could cause actual results to differ materially from our expectations expressed in the forward-looking statements, and further details and descriptions of these and other factors are disclosed in the Company’s Management’s Discussion and Analysis (“MD&A”), including under the section entitled “Risk Factors”.

The reader is cautioned to consider these, and other factors carefully and not to place undue reliance on forward-looking statements, which may not be appropriate for other purposes. The Company is under no obligation (and expressly disclaims any such obligation) to update or alter the forward-looking statements whether as a result of new information, future events or otherwise, unless required by law.

About goeasy

goeasy Ltd. is a Canadian company, headquartered in Mississauga, Ontario, that provides non-prime leasing and lending services through its easyhome, easyfinancial and LendCare brands. Supported by approximately 2,400 employees, the Company offers a wide variety of financial products and services including unsecured and secured instalment loans, merchant financing through a variety of verticals and lease-to-own merchandise. Customers can transact seamlessly through an omnichannel model that includes online and mobile platforms, over 400 locations across Canada, and point-of-sale financing offered in the retail, powersports, automotive, home improvement and healthcare verticals, through over 8,500 merchant partners across Canada. Throughout the Company’s history, it has acquired and organically served over 1.3 million Canadians and originated over $11.4 billion in loans.

Accredited by the Better Business Bureau, goeasy is the proud recipient of several awards in recognition of its exceptional culture and continued business growth including Waterstone Canada’s Most Admired Corporate Cultures, ranking on the 2022 Report on Business Women Lead Here executive gender diversity benchmark, placing on the Report on Business ranking of Canada’s Top Growing Companies, ranking on the TSX30, Greater Toronto Top Employers Award and has been certified as a Great Place to Work®. The Company is represented by a diverse group of team members from 78 nationalities who believe strongly in giving back to communities in which it operates. To date, goeasy has raised and donated over $4.9 million to support its long-standing partnerships with BGC Canada, Habitat for Humanity and many other local charities.

goeasy Ltd.’s. common shares are listed on the TSX under the trading symbol “GSY”. goeasy is rated BB- with a stable trend from S&P and Ba3 with a stable trend from Moody’s.

For more information about goeasy and our business units, visit www.goeasy.com, www.easyfinancial.com, www.lendcare.ca,  www.easyhome.ca.

For further information contact:

Jason Mullins
President & Chief Executive Officer
(905) 272-2788

Farhan Ali Khan
Senior Vice President, Chief Corporate Development Officer
(905) 272-2788

Notes:

These are non-IFRS ratios. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release.
2 These are non-IFRS measures. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release.
3 These are supplementary financial measures. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release.
4 These are capital management measures. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release.
5 Non-IFRS ratios, non-IFRS measures, supplementary financial measures and capital management measures are not determined in accordance with IFRS, do not have standardized meanings and may not be comparable to similar financial measures presented by other companies.


goeasy Ltd.

 

 

 

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 

 

(Unaudited)

 

 

(Expressed in thousands of Canadian dollars)

 

 

 

 

 

 

 

 

 

As At

As At

 

June 30,

December 31,

 

2023

2022

 

 

 

ASSETS

 

 

Cash

74,503

62,654

Accounts receivable

26,249

25,697

Prepaid expenses

11,692

8,334

Income taxes recoverable

-

2,323

Consumer loans receivable, net

3,014,883

2,627,357

Investments

61,617

57,304

Lease assets

46,022

48,437

Property and equipment, net

31,936

35,856

Derivative financial assets

36,702

49,444

Intangible assets, net

131,835

138,802

Right-of-use assets, net

64,210

65,758

Goodwill

180,923

180,923

TOTAL ASSETS

3,680,572

3,302,889

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

Liabilities

 

 

Revolving credit facility

273,477

148,646

Accounts payable and accrued liabilities

58,422

51,136

Income taxes payable

66

-

Dividends payable

15,876

14,965

Unearned revenue

29,637

28,661

Accrued interest

6,396

10,159

Deferred tax liabilities, net

20,859

24,692

Lease liabilities

72,969

74,328

Secured borrowings

113,731

105,792

Revolving securitization warehouse facilities

984,279

805,825

Derivative financial liabilities

6,783

-

Notes payable

1,144,775

1,168,997

TOTAL LIABILITIES

2,727,270

2,433,201

 

 

 

Shareholders' equity

 

 

Share capital

423,608

419,046

Contributed surplus

19,382

21,499

Accumulated other comprehensive income

8,706

2,776

Retained earnings

501,606

426,367

TOTAL SHAREHOLDERS' EQUITY

953,302

869,688

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

3,680,572

3,302,889

 

 

 

 

 

 



goeasy Ltd.

 

 

 

 

 

 

 

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

(Unaudited)

 

 

 

 

(Expressed in thousands of Canadian dollars, except earnings per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Six Months Ended

 

June 30,

June 30,

June 30,

June 30,

 

2023

2022

2023

2022

 

 

 

 

 

REVENUE

 

 

 

 

Interest income

213,563

169,311

414,991

326,135

Lease revenue

25,052

25,948

50,617

52,826

Commissions earned

57,532

51,343

111,448

95,201

Charges and fees

6,781

5,050

13,169

9,632

 

302,928

251,652

590,225

483,794

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

BAD DEBTS

84,634

67,936

160,530

122,085

 

 

 

 

 

OTHER OPERATING EXPENSES

 

 

 

 

Salaries and benefits

50,546

43,908

101,709

85,872

Stock-based compensation

2,974

2,490

5,998

4,790

Advertising and promotion

8,992

9,383

16,239

18,893

Occupancy

6,396

6,184

13,040

12,563

Technology costs

6,459

5,460

13,748

10,700

Underwriting and collections

4,093

3,531

8,078

6,622

Other expenses

6,715

7,268

15,140

16,040

 

86,175

78,224

173,952

155,480

 

 

 

 

 

DEPRECIATION AND AMORTIZATION

 

 

 

 

Depreciation of lease assets

8,406

8,195

16,913

16,660

Amortization of intangible assets

5,482

4,915

10,791

10,128

Depreciation of right-of-use assets

5,271

4,971

10,517

9,840

Depreciation of property and equipment

2,309

2,228

4,804

4,453

 

21,468

20,309

43,025

41,081

 

 

 

 

 

TOTAL OPERATING EXPENSES

192,277

166,469

377,507

318,646

 

 

 

 

 

OPERATING INCOME

110,651

85,183

212,718

165,148

 

 

 

 

 

OTHER INCOME (LOSS)

2,330

(6,819)

4,313

(24,344)

 

 

 

 

 

FINANCE COSTS

(37,653)

(24,445)

(71,879)

(47,924)

 

 

 

 

 

INCOME BEFORE INCOME TAXES

75,328

53,919

145,152

92,880

 

 

 

 

 

INCOME TAX EXPENSE (RECOVERY)

 

 

 

 

Current

23,436

20,325

42,996

36,621

Deferred

(3,658)

(4,706)

(4,830)

(8,137)

 

19,778

15,619

38,166

28,484

 

 

 

 

 

NET INCOME

55,550

38,300

106,986

64,396

 

 

 

 

 

BASIC EARNINGS PER SHARE

3.29

2.37

6.36

3.96

DILUTED EARNINGS PER SHARE

3.26

2.32

6.27

3.86

 

 

 

 

 



SEGMENT REPORTING

 

 

 

 

(Expressed in thousands of Canadian dollars, except earnings per share)

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2023

 

easyfinancial

easyhome

Corporate

Total

 

 

 

 

 

Revenue

 

 

 

 

Interest income

204,912

8,651

-

 

213,563

 

Lease revenue

-

25,052

-

 

25,052

 

Commissions earned

53,973

3,559

-

 

57,532

 

Charges and fees

5,868

913

-

 

6,781

 

 

264,753

38,175

-

 

302,928

 

 

 

 

 

 

Operating expenses

 

 

 

 

Bad debts

81,181

3,453

-

 

84,634

 

Other operating expenses

48,846

14,978

22,351

 

86,175

 

Depreciation and amortization

9,305

10,544

1,619

 

21,468

 

 

139,332

28,975

23,970

 

192,277

 

 

 

 

 

 

Operating income (loss)

125,421

9,200

(23,970

)

110,651

 

 

 

 

 

 

Other income

 

 

 

2,330

 

 

 

 

 

 

Finance costs

 

 

 

(37,653

)

 

 

 

 

 

Income before income taxes

 

 

 

75,328

 

 

 

 

 

 

Income taxes

 

 

 

19,778

 

 

 

 

 

 

Net income

 

 

 

55,550

 

 

 

 

 

 

Diluted earnings per share

 

 

 

3.26

 

 

 

 

 

 

 

Three Months Ended June 30, 2022

 

easyfinancial

easyhome

Corporate

Total

 

 

 

 

 

Revenue

 

 

 

 

Interest income

162,140

7,171

-

 

169,311

 

Lease revenue

-

25,948

-

 

25,948

 

Commissions earned

47,897

3,446

-

 

51,343

 

Charges and fees

4,077

973

-

 

5,050

 

 

214,114

37,538

-

 

251,652

 

 

 

 

 

 

Operating expenses

 

 

 

 

Bad debts

65,021

2,915

-

 

67,936

 

Other operating expenses

45,137

15,412

17,675

 

78,224

 

Depreciation and amortization

8,374

10,473

1,462

 

20,309

 

 

118,532

28,800

19,137

 

166,469

 

 

 

 

 

 

Operating income (loss)

95,582

8,738

(19,137

)

85,183

 

 

 

 

 

 

Other loss

 

 

 

(6,819

)

 

 

 

 

 

Finance costs

 

 

 

(24,445

)

 

 

 

 

 

Income before income taxes

 

 

 

53,919

 

 

 

 

 

 

Income taxes

 

 

 

15,619

 

 

 

 

 

 

Net income

 

 

 

38,300

 

 

 

 

 

 

Diluted earnings per share

 

 

 

2.32

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2023

 

easyfinancial

easyhome

Corporate

Total

 

 

 

 

 

Revenue

 

 

 

 

Interest income

398,091

16,900

-

 

414,991

 

Lease revenue

-

50,617

-

 

50,617

 

Commissions earned

104,357

7,091

-

 

111,448

 

Charges and fees

11,282

1,887

-

 

13,169

 

 

513,730

76,495

-

 

590,225

 

 

 

 

 

 

Operating expenses

 

 

 

 

Bad debts

154,446

6,084

-

 

160,530

 

Other operating expenses

96,624

30,826

46,502

 

173,952

 

Depreciation and amortization

18,511

21,278

3,236

 

43,025

 

 

269,581

58,188

49,738

 

377,507

 

 

 

 

 

 

Operating income (loss)

244,149

18,307

(49,738

)

212,718

 

 

 

 

 

 

Other income

 

 

 

4,313

 

 

 

 

 

 

Finance costs

 

 

 

(71,879

)

 

 

 

 

 

Income before income taxes

 

 

 

145,152

 

 

 

 

 

 

Income taxes

 

 

 

38,166

 

 

 

 

 

 

Net income

 

 

 

106,986

 

 

 

 

 

 

Diluted earnings per share

 

 

 

6.27

 

 

 

 

 

 

 

Six Months Ended June 30, 2022

 

easyfinancial

easyhome

Corporate

Total

 

 

 

 

 

Revenue

 

 

 

 

Interest income

312,289

13,846

-

 

326,135

 

Lease revenue

-

52,826

-

 

52,826

 

Commissions earned

88,754

6,447

-

 

95,201

 

Charges and fees

7,681

1,951

-

 

9,632

 

 

408,724

75,070

-

 

483,794

 

 

 

 

 

 

Operating expenses

 

 

 

 

Bad debts

117,140

4,945

-

 

122,085

 

Other operating expenses

88,670

30,830

35,980

 

155,480

 

Depreciation and amortization

17,007

21,186

2,888

 

41,081

 

 

222,817

56,961

38,868

 

318,646

 

 

 

 

 

 

Operating income (loss)

185,907

18,109

(38,868

)

165,148

 

 

 

 

 

 

Other loss

 

 

 

(24,344

)

 

 

 

 

 

Finance costs

 

 

 

(47,924

)

 

 

 

 

 

Income before income taxes

 

 

 

92,880

 

 

 

 

 

 

Income taxes

 

 

 

28,484

 

 

 

 

 

 

Net income

 

 

 

64,396

 

 

 

 

 

 

Diluted earnings per share

 

 

 

3.86

 


SUMMARY OF FINANCIAL RESULTS AND KEY PERFORMANCE INDICATORS

 

 

 

 

(Expressed in thousands of Canadian dollars, except earnings per share and percentages)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

June 30,

June 30,

Variance

Variance

2023

2022

$ / bps

% change

 

 

 

 

 

Summary Financial Results

 

 

 

 

Revenue

302,928

251,652

51,276

20.4%

Bad debts

84,634

67,936

16,698

24.6%

Other operating expenses

86,175

78,224

7,951

10.2%

EBITDA1

126,043

90,478

35,565

39.3%

EBITDA margin1

41.6%

36.0%

560 bps

15.6%

Depreciation and amortization

21,468

20,309

1,159

5.7%

Operating income

110,651

85,183

25,468

29.9%

Operating margin

36.5%

33.8%

270 bps

8.0%

Other income (loss)

2,330

(6,819)

9,149

134.2%

Finance costs

37,653

24,445

13,208

54.0%

Effective income tax rate

26.3%

29.0%

(270 bps)

(9.3%)

Net income

55,550

38,300

17,250

45.0%

Diluted earnings per share

3.26

2.32

0.94

40.5%

Return on assets

6.2%

5.5%

70 bps

12.7%

Return on equity

24.0%

20.2%

380 bps

18.8%

Return on tangible common equity1

34.6%

33.0%

160 bps

4.8%

 

 

 

 

 

Adjusted Financial Results1

 

 

 

 

Other operating expenses

94,440

86,137

8,303

9.6%

Efficiency ratio

31.2%

34.2%

(300 bps)

(8.8%)

Operating income

114,067

88,740

25,327

28.5%

Operating margin

37.7%

35.3%

240 bps

6.8%

Net income

56,039

46,830

9,209

19.7%

Diluted earnings per share

3.28

2.83

0.45

15.9%

Return on assets

6.2%

6.7%

(50 bps)

(7.5%)

Return on equity

24.2%

24.7%

(50 bps)

(2.0%)

Return on tangible common equity

33.4%

38.0%

(460 bps)

(12.1%)

 

 

 

 

 

Key Performance Indicators

 

 

 

 

 

 

 

 

 

Segment Financials

 

 

 

 

easyfinancial revenue

264,753

214,114

50,639

23.7%

easyfinancial operating margin

47.4%

44.6%

280 bps

6.3%

easyhome revenue

38,175

37,538

637

1.7%

easyhome operating margin

24.1%

23.3%

80 bps

3.4%

 

 

 

 

 

Portfolio Indicators

 

 

 

 

Gross consumer loans receivable

3,200,213

2,369,843

830,370

35.0%

Growth in consumer loans receivable

209,527

215,543

(6,016)

(2.8%)

Gross loan originations

666,783

628,189

38,594

6.1%

Total yield on consumer loans (including ancillary products)1

35.4%

39.0%

(360 bps)

(9.2%)

Net charge offs as a percentage of average gross consumer loans receivable

9.1%

9.3%

(20 bps)

(2.2%)

Free cash flows from operations before net growth in gross consumer loans receivable1

76,473

56,918

19,555

34.4%

Potential monthly lease revenue1

7,558

7,634

(76)

(1.0%)

1 EBITDA, adjusted other operating expenses, adjusted operating income, adjusted net income and free cash flows from operations before net growth in gross consumer loans receivable are non-IFRS measures. EBITDA margin, efficiency ratio, adjusted operating margin, adjusted diluted earnings per share, adjusted return on equity, adjusted return on assets, reported and adjusted return on tangible common equity and total yield on consumer loans (including ancillary products) are non-IFRS ratios. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

June 30,

June 30,

Variance

Variance

2023

2022

$ / bps

% change

 

 

 

 

 

Summary Financial Results

 

 

 

 

Revenue

590,225

483,794

106,431

22.0%

Bad debts

160,530

122,085

38,445

31.5%

Other operating expenses

173,952

155,480

18,472

11.9%

EBITDA1

243,143

165,225

77,918

47.2%

EBITDA margin1

41.2%

34.2%

700 bps

20.5%

Depreciation and amortization

43,025

41,081

1,944

4.7%

Operating income

212,718

165,148

47,570

28.8%

Operating margin

36.0%

34.1%

190 bps

5.6%

Other income (loss)

4,313

(24,344)

28,657

117.7%

Finance costs

71,879

47,924

23,955

50.0%

Effective income tax rate

26.3%

30.7%

(440 bps)

(14.3%)

Net income

106,986

64,396

42,590

66.1%

Diluted earnings per share

6.27

3.86

2.41

62.4%

Return on assets

6.1%

4.7%

140 bps

29.8%

Return on equity

23.6%

16.7%

690 bps

41.3%

Return on tangible common equity1

34.4%

27.6%

680 bps

24.6%

 

 

 

 

 

Adjusted Financial Results1

 

 

 

 

Other operating expenses

189,622

169,038

20,584

12.2%

Efficiency ratio

32.1%

34.9%

(280 bps)

(8.0%)

Operating income

220,511

174,801

45,710

26.1%

Operating margin

37.4%

36.1%

130 bps

3.5%

Net income

108,972

92,609

16,363

17.7%

Diluted earnings per share

6.39

5.55

0.84

15.1%

Return on assets

6.2%

6.8%

(60 bps)

(8.8%)

Return on equity

24.0%

24.1%

(10 bps)

(0.4%)

Return on tangible common equity

33.6%

36.9%

(330 bps)

(8.9%)

 

 

 

 

 

Key Performance Indicators

 

 

 

 

 

 

 

 

 

Segment Financials

 

 

 

 

easyfinancial revenue

513,730

408,724

105,006

25.7%

easyfinancial operating margin

47.5%

45.5%

200 bps

4.4%

easyhome revenue

76,495

75,070

1,425

1.9%

easyhome operating margin

23.9%

24.1%

(20 bps)

(0.8%)

 

 

 

 

 

Portfolio Indicators

 

 

 

 

Gross consumer loans receivable

3,200,213

2,369,843

830,370

35.0%

Growth in consumer loans receivable

405,519

339,504

66,015

19.4%

Gross loan originations

1,282,402

1,104,732

177,670

16.1%

Total yield on consumer loans (including ancillary products)1

35.5%

38.9%

(340 bps)

(8.7%)

Net charge offs as a percentage of average gross consumer loans receivable

9.0%

9.1%

(10 bps)

(0.9%)

Free cash flows from operations before net growth in gross consumer loans receivable1

158,574

96,846

61,728

63.7%

Potential monthly lease revenue1

7,558

7,634

(76)

(1.0%)


Non-IFRS Measures and Other Financial Measures

The Company uses a number of financial measures to assess its performance. Some of these measures are not calculated in accordance with International Financial Reporting Standards (IFRS) as issued by International Accounting Standards Board (IASB), are not identified by IFRS and do not have standardized meanings that would ensure consistency and comparability among companies using these measures. The Company believes that non-IFRS measures are useful in assessing ongoing business performance and provide readers with a better understanding of how management assesses performance. These non-IFRS measures are used throughout this press release and listed below. An explanation of the composition of non-IFRS measures and other financial measures can be found in the Company’s MD&A, available on www.sedar.com.

Adjusted Net Income and Adjusted Diluted Earnings Per Share

Adjusted net income is a non-IFRS measure, while adjusted diluted earnings per share is a non-IFRS ratio. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 32 of the Company’s MD&A for the three and six-month periods ended June 30, 2023. Items used to calculate adjusted net income and adjusted earnings per share for the three and six-month periods ended June 30, 2023 and 2022 include those indicated in the chart below:

 

Three Months Ended

Six Months Ended


($ in 000’s except earnings per share)

June 30,

2023

June 30,

2022

June 30,

2023

June 30,

2022

 

 

 

 

 

Net income as stated

55,550

 

38,300

 

106,986

 

64,396

 

Impact of adjusting items

 

 

 

 

Other operating expenses

 

 

 

 

Contract exit fee1

-

 

-

 

934

 

-

 

Integration costs2

141

 

282

 

310

 

789

 

Corporate development costs4

-

 

-

 

-

 

2,314

 

Depreciation and amortization

 

 

 

 

Amortization of acquired intangible assets3

3,275

 

3,275

 

6,550

 

6,550

 

Other (income) loss5

(2,330

)

6,819

 

(4,313

)

24,344

 

Total pre-tax impact of adjusting items

1,086

 

10,376

 

3,481

 

33,997

 

Income tax impact of above adjusting items

(597

)

(1,846

)

(1,494

)

(5,784

)

After-tax impact of adjusting items

489

 

8,530

 

1,987

 

28,213

 

 

 

 

 

 

Adjusted net income

56,039

 

46,830

 

108,973

 

92,609

 

 

 

 

 

 

Weighted average number of diluted shares outstanding

17,061

 

16,522

 

17,064

 

16,677

 

 

 

 

 

 

Diluted earnings per share as stated

3.26

 

2.32

 

6.27

 

3.86

 

Per share impact of adjusting items

0.02

 

0.51

 

0.12

 

1.69

 

Adjusted diluted earnings per share

3.28

 

2.83

 

6.39

 

5.55

 

Adjusting item related to a contract exit fee
1 In the fourth quarter of 2022, the Company decided to terminate its agreement with a third-party technology provider that was contracted in 2020 to develop a new loan management system. After careful evaluation, the Company determined that the performance to date was unsatisfactory, and the additional investment necessary to complete the development was no longer economical, relative to the anticipated business value and other available options. In the first quarter of 2023, the Company settled its dispute with the third-party technology provider for $0.9 million, reported under Other operating expenses.
Adjusting items related to the LendCare Acquisition
2 Integration costs related to advisory and consulting costs, employee incentives, representation and warranty insurance costs, and other integration costs related to the acquisition of LendCare as a result of the integration with LendCare.
3 Amortization of the $131 million intangible asset related to the acquisition of LendCare with an estimated useful life of ten years.
Adjusting items related to the corporate development costs
4 Corporate development costs in the first quarter of 2022 were related to the exploration of a strategic acquisition opportunity, which the Company elected to not pursue, including advisory, consulting and legal costs, reported under Other operating expenses.
Adjusting item related to other income (loss)
5 For the three and six-month periods ended June 30, 2023, net investment income was mainly due to fair value change on the Company’s investment in Affirm. For the three and six-month periods ended June 30, 2022, net investment losses were mainly due to fair value changes on the Company’s investments in Affirm and its related TRS.
Adjusted Other Operating Expenses and Efficiency Ratio

Adjusted other operating expenses is a non-IFRS measure, while efficiency ratio is a non-IFRS ratio. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 32 of the Company’s MD&A for the three and six-month periods ended June 30, 2023. Items used to calculate adjusted other operating expenses and efficiency ratio for the three and six-month periods ended June 30, 2023 and 2022 include those indicated in the chart below:

 

Three Months Ended

Six Months Ended


($ in 000’s except earnings per share)

June 30,

2023

June 30,

2022

June 30,

2023

June 30,

2022

 

 

 

 

 

Other operating expenses as stated

86,175

78,224

173,952

155,480

 

 

 

 

 

Impact of adjusting items1

 

 

 

 

Other operating expenses

 

 

 

 

Contract exit fee

-

-

(934)

-

Integration costs

(141)

(282)

(310)

(789)

Corporate development costs

-

-

-

(2,314)

Depreciation and amortization

 

 

 

 

Depreciation of lease assets

8,406

8,195

16,913

16,660

Total impact of adjusting items

8,265

7,913

15,669

13,557

 

 

 

 

 

Adjusted other operating expenses

94,440

86,137

189,621

169,037

 

 

 

 

 

Total revenue

302,928

251,652

590,225

483,794

 

 

 

 

 

Efficiency ratio

31.2%

34.2%

32.1%

34.9%

1 For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.

Adjusted Operating Income and Adjusted Operating Margin

Adjusted operating income is a non-IFRS measure, while adjusted operating margin is a non-IFRS ratio. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 32 of the Company’s MD&A for the three and six-month periods ended June 30, 2023. Items used to calculate adjusted operating income and adjusted operating margins for the three and six-month periods ended June 30, 2023 and 2022 include those indicated in the chart below:

 

Three Months Ended


($ in 000’s except percentages)

June 30,

2023

June 30,

2023 (adjusted)

June 30,

2022

June 30,

2022 (adjusted)

 

 

 

 

 

easyfinancial

 

 

 

 

Operating income

125,421

125,421

95,582

95,582

Divided by revenue

264,753

264,753

214,114

214,114

 

 

 

 

 

easyfinancial operating margin

47.4%

47.4%

44.6%

44.6%

 

 

 

 

 

easyhome

 

 

 

 

Operating income

9,200

9,200

8,738

8,738

Divided by revenue

38,175

38,175

37,538

37,538

 

 

 

 

 

easyhome operating margin

24.1%

24.1%

23.3%

23.3%

 

 

 

 

 

Total

 

 

 

 

Operating income

110,651

110,651

85,183

85,183

Other operating expenses1

 

 

 

 

Integration costs

-

141

-

282

Depreciation and amortization1

 

 

 

 

Amortization of acquired intangible assets

-

3,275

-

3,275

Adjusted operating income

110,651

114,067

85,183

88,740

 

 

 

 

 

Divided by revenue

302,928

302,928

251,652

251,652

 

 

 

 

 

Total operating margin

36.5%

37.7%

33.8%

35.3%

1 For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.

 

Six Months Ended


($ in 000’s except percentages)

June 30,

2023

June 30,

2023 (adjusted)

June 30,

2022

June 30,

2022 (adjusted)

 

 

 

 

 

easyfinancial

 

 

 

 

Operating income

244,149

244,149

185,907

185,907

Divided by revenue

513,730

513,730

408,724

408,724

 

 

 

 

 

easyfinancial operating margin

47.5%

47.5%

45.5%

45.5%

 

 

 

 

 

easyhome

 

 

 

 

Operating income

18,307

18,307

18,109

18,109

Divided by revenue

76,495

76,495

75,070

75,070

 

 

 

 

 

easyhome operating margin

23.9%

23.9%

24.1%

24.1%

 

 

 

 

 

Total

 

 

 

 

Operating income

212,718

212,718

165,148

165,148

Other operating expenses1

 

 

 

 

Contract exit fee

-

934

-

-

Integration costs

-

310

-

789

Corporate development costs

-

-

-

2,314

Depreciation and amortization1

 

 

 

 

Amortization of acquired intangible assets

-

6,550

-

6,550

Adjusted operating income

212,718

220,512

165,148

174,801

 

 

 

 

 

Divided by revenue

590,225

590,225

483,794

483,794

 

 

 

 

 

Total operating margin

36.0%

37.4%

34.1%

36.1%

1 For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.

Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and EBITDA Margin

EBITDA is a non-IFRS measure, while EBITDA margin is a non-IFRS ratio. Refer to “Key Performance
Indicators and Non-IFRS Measures” section on page 32 of the Company’s MD&A for the three and six-month periods ended June 30, 2023. Items used to calculate EBITDA and EBITDA margin for the three and six-month periods ended June 30, 2023 and 2022 include those indicated in the chart below:

 

Three Months Ended

Six Months Ended

($in 000’s except percentages)

June 30,

2023

June 30,

2022

June 30,

2023

June 30,

2022

 

 

 

 

 

Net income as stated

55,550

 

38,300

 

106,986

 

64,396

 

 

 

 

 

 

Finance cost

37,653

 

24,445

 

71,879

 

47,924

 

Income tax expense

19,778

 

15,619

 

38,166

 

28,484

 

Depreciation and amortization

21,468

 

20,309

 

43,025

 

41,081

 

Depreciation of lease assets

(8,406

)

(8,195

)

(16,913

)

(16,660

)

EBITDA

126,043

 

90,478

 

243,143

 

165,225

 

 

 

 

 

 

Divided by revenue

302,928

 

251,652

 

590,225

 

483,794

 

 

 

 

 

 

EBITDA margin

41.6

%

36.0

%

41.2

%

34.2

%

Free Cash Flow from Operations before Net Growth in Gross Consumer Loans Receivable

Free cash flow from operations before net growth in gross consumer loans receivable is a non-IFRS measure. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 32 of the Company’s MD&A for the three and six-month periods ended June 30, 2023. Items used to calculate free cash flow from operations before net growth in gross consumer loans receivable for the three and six-month periods ended June 30, 2023 and 2022 include those indicated in the chart below:

 

Three Months Ended

Six Months Ended

 

June 30,

2023

June 30,

2022

June 30,

2023

June 30,

2022

 

 

 

 

 

Cash used in operating activities

(133,054

)

(158,625

)

(246,945

)

(242,658

)

 

 

 

 

 

Net growth in gross consumer loans receivable during the period

209,527

 

215,543

 

405,519

 

339,504

 

 

 

 

 

 

Free cash flows from operations before net growth in gross consumer loans receivable

76,473

 

56,918

 

158,574

 

96,846

 

Adjusted Return on Assets

Adjusted return on assets is a non-IFRS ratio. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 32 of the Company’s MD&A for the three and six-month periods ended June 30, 2023. Items used to calculate adjusted return on assets for the three and six-month periods ended June 30, 2023 and 2022 include those indicated in the chart below:

 

Three Months Ended

($in 000’s except percentages)

June 30,

2023

June 30,

2023

(adjusted)

June 30,

2022

June 30,

2022

(adjusted)

 

 

 

 

 

Net income as stated

55,550

55,550

38,300

38,300

After-tax impact of adjusting items1

-

489

-

8,530

Adjusted net income

55,550

56,039

38,300

46,830

 

 

 

 

 

Multiplied by number of periods in a year

X 4

X 4

X 4

X 4

 

 

 

 

 

Divided by average total assets for the period

3,587,282

3,587,282

2,792,034

2,792,034

 

 

 

 

 

Return on assets

6.2%

6.2%

5.5%

6.7%

1 For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.

 

Six Months Ended

($in 000’s except percentages)

June 30,

2023

June 30,

2023

(adjusted)

June 30,

2022

June 30,

2022

(adjusted)

 

 

 

 

 

Net income as stated

106,986

106,986

64,396

64,396

After-tax impact of adjusting items1

-

1,987

-

28,213

Adjusted net income

106,986

108,973

64,396

92,609

 

 

 

 

 

Multiplied by number of periods in a year

X 4/2

X 4/2

X 4/2

X 4/2

 

 

 

 

 

Divided by average total assets for the period

3,492,484

3,492,484

2,726,740

2,726,740

 

 

 

 

 

Return on assets

6.1%

6.2%

4.7%

6.8%

1 For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.

Adjusted Return on Equity

Adjusted return on equity is a non-IFRS ratio. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 32 of the Company’s MD&A for the three and six-month periods ended June 30, 2023. Items used to calculate adjusted return on equity for the three and six-month periods ended June 30, 2023 and 2022 include those indicated in the chart below:

 

Three Months Ended

($in 000’s except percentages)

June 30,

2023

June 30,

2023

(adjusted)

June 30,

2022

June 30,

2022

(adjusted)

 

 

 

 

 

Net income as stated

55,550

55,550

38,300

38,300

After-tax impact of adjusting items1

-

489

-

8,530

Adjusted net income

55,550

56,039

38,300

46,830

 

 

 

 

 

Multiplied by number of periods in a year

X 4

X 4

X 4

X 4

 

 

 

 

 

Divided by average shareholders’ equity for the period

927,703

927,703

759,896

759,896

 

 

 

 

 

Return on equity

24.0%

24.2%

20.2%

24.7%

1 For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.

 

Six Months Ended

($in 000’s except percentages)

June 30,

2023

June 30,

2023

(adjusted)

June 30,

2022

June 30,

2022

(adjusted)

 

 

 

 

 

Net income as stated

106,986

106,986

64,396

64,396

After-tax impact of adjusting items1

-

1,987

-

28,213

Adjusted net income

106,986

108,973

64,396

92,609

 

 

 

 

 

Multiplied by number of periods in a year

X 4/2

X 4/2

X 4/2

X 4/2

 

 

 

 

 

Divided by average shareholders’ equity for the period

908,364

908,364

769,902

769,902

 

 

 

 

 

Return on equity

23.6%

24.0%

16.7%

24.1%

1 For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.

Return on Tangible Common Equity

Reported and adjusted return on tangible common equity are non-IFRS ratios. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 32 of the Company’s MD&A for the three and six-month periods ended June 30, 2023. Items used to calculate reported and adjusted return on tangible common equity for the three and six-month periods ended June 30, 2023 and 2022 include those indicated in the chart below:

 

Three Months Ended

($ in 000’s except percentages)

June 30,

2023

June 30,

2023

(adjusted)

June 30,

2022

June 30,

2022

(adjusted)

 

 

 

 

 

Net income as stated

55,550

 

55,550

 

38,300

 

38,300

 

Amortization of acquired intangible assets

3,275

 

3,275

 

3,275

 

3,275

 

Income tax impact of the above item

(868

)

(868

)

(868

)

(868

)

Net income before amortization of acquired intangible assets, net of income tax

57,957

 

57,957

 

40,707

 

40,707

 

 

 

 

 

 

Impact of adjusting items1

 

 

 

 

Other operating expenses

 

 

 

 

Integration costs

-

 

141

 

-

 

282

 

Other loss (income)

-

 

(2,330

)

-

 

6,819

 

Total pre-tax impact of adjusting items

-

 

(2,189

)

-

 

7,101

 

Income tax impact of above adjusting items

-

 

271

 

-

 

(978

)

After-tax impact of adjusting items

-

 

(1,918

)

-

 

6,123

 

 

 

 

 

 

Adjusted net income

57,957

 

56,039

 

40,707

 

46,830

 

 

 

 

 

 

Multiplied by number of periods in a year

X 4

X 4

X 4

X 4

 

 

 

 

 

Average shareholders’ equity

927,703

 

927,703

 

759,896

 

759,896

 

Average goodwill

(180,923

)

(180,923

)

(180,923

)

(180,923

)

Average acquired intangible assets2

(104,254

)

(104,254

)

(117,354

)

(117,354

)

Average related deferred tax liabilities

27,627

 

27,627

 

31,099

 

31,099

 

Divided by average tangible common equity

670,153

 

670,153

 

492,718

 

492,718

 

 

 

 

 

 

Return on tangible common equity

34.6

%

33.4

%

33.0

%

38.0

%

1 For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.
2 Excludes intangible assets relating to software.

 

Six Months Ended

($ in 000’s except percentages)

June 30,

2023

 

June 30,

2023

(adjusted)

 

June 30,

2022

 

June 30,

2022

(adjusted)

 

 

 

 

 

 

 

 

 

 

Net income as stated

106,986

 

106,986

 

64,396

 

64,396

 

Amortization of acquired intangible assets

6,550

 

6,550

 

6,550

 

6,550

 

Income tax impact of the above item

(1,736

)

(1,736

)

(1,736

)

(1,736

)

Net income before amortization of acquired intangible assets, net of income tax

111,800

 

111,800

 

69,210

 

69,210

 

 

 

 

 

 

 

 

 

 

Impact of adjusting items1

 

 

 

 

 

 

 

 

Other operating expenses

 

 

 

 

 

 

 

 

Contract exit fee

-

 

934

 

-

 

-

 

Integration costs

-

 

310

 

-

 

789

 

Corporate development costs

-

 

-

 

-

 

2,314

 

Other (income) loss

-

 

(4,313

)

-

 

24,344

 

Total pre-tax impact of adjusting items

-

 

(3,069

)

-

 

27,447

 

Income tax impact of above adjusting items

-

 

242

 

-

 

(4,048

)

After-tax impact of adjusting items

-

 

(2,827

)

-

 

23,399

 

 

 

 

 

 

 

 

 

 

Adjusted net income

111,800

 

108,973

 

69,210

 

92,609

 

 

 

 

 

 

 

 

 

 

Multiplied by number of periods in a year

X 4/2

 

X 4/2

 

X 4/2

 

X 4/2

 

 

 

 

 

 

 

 

 

 

Average shareholders’ equity

908,364

 

908,364

 

769,902

 

769,902

 

Average goodwill

(180,923

)

(180,923

)

(180,923

)

(180,923

)

Average acquired intangible assets2

(105,892)

 

(105,892

)

(118,992

)

(118,992

)

Average related deferred tax liabilities

28,061

 

28,061

 

31,533

 

31,533

 

Divided by average tangible common equity

649,610

 

649,610

 

501,520

 

501,520

 

 

 

 

 

 

 

 

 

 

Return on tangible common equity

34.4

%

33.6

%

27.6

%

36.9

%

1 For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.
2 Excludes intangible assets relating to software.

easyhome Financial Revenue

easyhome financial revenue is a non-IFRS measure. It’s calculated as total company revenue less easyfinancial revenue and leasing revenue. The Company believes that easyhome financial revenue is an important measure of the performance of the easyhome segment. Items used to calculate easyhome financial revenue for the three-month periods ended June 30, 2023 and 2022 include those indicated in the chart below:

($in 000’s)

Three Months Ended

June 30,
2023

June 30,
2022

Total company revenue

302,928

251,652

Less: easyfinancial revenue

(264,753)

(214,114)

Less: leasing revenue

(26,616)

(27,641)

easyhome financial revenue

11,559

9,897

Total Yield on Consumer Loans as a Percentage of Average Gross Consumer Loans Receivable

Total yield on consumer loans as a percentage of average gross consumer loans receivable is a non-IFRS ratio. See description in section “Portfolio Analysis” on page 21 of the Company’s MD&A for the three and six-month periods ended June 30, 2023. Items used to calculate total yield on consumer loans as a percentage of average gross consumer loans receivable for the three and six-month periods ended June 30, 2023 and 2022 include those indicated in the chart below:

 

Three Months Ended

Six Months Ended

($in 000’s except percentages)

June 30,
2023

June 30,
2022

June 30,
2023

June 30,
2022

 

 

 

 

 

Total Company revenue

302,928

251,652

590,225

483,794

Less: Leasing revenue

(26,616)

(27,641)

(53,764)

(56,207)

Financial revenue

276,312

224,011

536,461

427,587

 

 

 

 

 

Multiplied by number of periods in a year

X 4

X 4

X 4/2

X 4/2

 

 

 

 

 

Divided by average gross consumer loans receivable

3,125,896

2,295,232

3,025,402

2,198,495

 

 

 

 

 

Total yield on consumer loans as a percentage of average gross consumer loans receivable (annualized)

35.4%

39.0%

35.5%

38.9%

Net Principal Written and Percentage Net Principal Written to New Customers

Net principal written (Net loan advances) is a non-IFRS measure. See description in section “Portfolio Analysis” on page 21 of the Company’s MD&A for the three and six-month periods ended June 30, 2023. The percentage of net loan advances to new customers is a non-IFRS ratio. It is calculated as loan originations to new customers divided by the net principal written. The Company uses percentage of net loan advances to new customers, among other measures, to assess the operating performance of its lending business. Items used to calculate the percentage of net loan advances to new customers for the three and six-month periods ended June 30, 2023 and 2022 include those indicated in the chart below:

 

Three Months Ended

Six Months Ended

($ in 000’s)

June 30,
2023

June 30,
2022

June 30,
2023

June 30,
2022

 

 

 

 

 

Gross loan originations

666,783

628,189

1,282,402

1,104,732

 

 

 

 

 

Loan originations to new customers

348,695

301,184

651,238

518,878

 

 

 

 

 

Loan originations to existing customers

318,088

327,005

631,164

585,854

Less: Proceeds applied to repay existing loans

(174,045)

(162,880)

(336,999)

(296,917)

Net advance to existing customers

144,043

164,125

294,165

288,937

 

 

 

 

 

Net principal written

492,738

465,309

945,403

807,815


Percentage net advances to new

customers




70.8%




64.7%




68.9%




64.2%

Net Debt to Net Capitalization

Net debt to net capitalization is a capital management measure. Refer to “Financial Condition” section on page 43 of the Company’s MD&A for the three and six-month periods ended June 30, 2023.

Average Loan Book Per Branch

Average loan book per branch is a supplementary financial measure. It is calculated as gross consumer loans receivable held by easyfinancial branch locations divided by the number of total easyfinancial branch locations.

Weighted Average Interest Rate

Weighted average interest rate is a supplementary financial measure. It Is calculated as the sum of individual loan balance multiplied by interest rate divided by gross consumer loans receivable.