Rifco Reports Record Fourth
Quarter and March 31, 2014 Annual Results
Net Income up 35%
Loan Originations up
39%
Red Deer, AB /
ACCESSWIRE / June 11, 2014 / Rifco Inc. (TSXV:
RFC) is pleased to announce record results for its wholly owned
subsidiary Rifco National Auto Finance for the fourth quarter and
the year ended March 31, 2014.
---------------------------------------------------------------------------------------
| | For the years | |
|Annual Financial |ended | |
|Highlights | | |
|-------------------------------------------------------------------------------------|
| |March |March | |
| |31, |31, | |
| |2014 |2013 | |
|-------------------------------------------------------------------------------------|
|($000’s, except ratios and per share)| | | |
|-------------------------------------------------------------------------------------|
|Net income |6,378 |4,730 |New record -Increased 35%|
|-------------------------------------------------------------------------------------|
|Originations |126,220 |91,121 |New record -Increased 39%|
|-------------------------------------------------------------------------------------|
|Finance receivables |199,615 |147,532 |New record -Increased 35%|
|-------------------------------------------------------------------------------------|
|Total revenues |30,260 |24,005 |New record -Increased 26%|
|-------------------------------------------------------------------------------------|
|Earnings per share basic |0.305 |0.233 |New record -Increased 31%|
|-------------------------------------------------------------------------------------|
|Average interest expense |5.27% |6.37% |New record |
| | | |-Improved by |
| | | |1.10% |
|-------------------------------------------------------------------------------------|
|Return on earning assets |3.73% |3.72% | |
|-------------------------------------------------------------------------------------|
|Return on equity |44.12% |58.88% | |
---------------------------------------------------------------------------------------
Annual Results
The Company reported strong
earnings growth for the year as a result of record originations,
record finance receivables, improved interest expense ratio and a
decreasing operating expenses ratio.
Rifco reported earnings per
share (EPS) in the year of $0.305, a 31% increase over the $0.233
reported in the prior year.
Revenue was $30.26M, a 26%
increase over the $24.01M for the prior year. Rifco reported net
income of $6.38M, an improvement of 35% from $4.73M for the prior
year.
Loan originations were
$126.22M, a 39% increase from $91.12M for the prior year. These
originations contributed to a 35% growth rate in finance
receivables to $199.62M from $147.53M for the prior
year.
The average interest expense
has decreased to 5.27% from 6.37% in the prior year. The Company is
benefiting from lower cost of funding from its bank borrowing and
securitization facilities.
The loan delinquency rate
increased to 3.10% from 3.01% in the prior year. The
average (12 month rolling) credit loss rate increased to 3.28% from
2.72% in the prior year.
Operating expenses increased
to $6.65M from $5.26M from the prior year. Increases were primarily
allocated to wages for increased staff count and various sales and
marketing initiatives. The operating expense ratio improved to
3.90% compared to 4.13% in the prior year. The improvement is
attributable to operational efficiencies and the growth in average
finance receivables.
Rifco has been granting
non-prime loans in the automotive sector for over 12 years and has
lent over $475M to date. The Company's underwriting and operational
systems have delivered solid credit performance throughout that
time.
Return on equity for the year
was 44%. Shareholders equity has increased by 65% while total
assets have grown by 32%. These favorable trends, if continued,
demonstrate the ability of Rifco to sustain its growth.
Rifco Annual Comparative Results
-------------------------------------------------------------------------------------------------------
|Statements of income | |
| | |
| | For |
| |the |
| |years |
| |ended |
|-----------------------------------------------------------------------------------------------------|
| |March 31, 2014|March 31, 2013|
|-----------------------------------------------------------------------------------------------------|
|($, 000’s, except per share and share count) | | |
|-----------------------------------------------------------------------------------------------------|
| | | |
|-----------------------------------------------------------------------------------------------------|
|Financial revenue | | |
|-----------------------------------------------------------------------------------------------------|
| | | |
|-----------------------------------------------------------------------------------------------------|
|Interest and fee income |30,260 |24,005 |
|-----------------------------------------------------------------------------------------------------|
| | | |
|-----------------------------------------------------------------------------------------------------|
|Financial expenses | | |
|-----------------------------------------------------------------------------------------------------|
|Interest expenses |8,616 |8,075 |
|-----------------------------------------------------------------------------------------------------|
| | | |
|-----------------------------------------------------------------------------------------------------|
|Net financial income before provision for impairment |21,644 |15,930 |
|-----------------------------------------------------------------------------------------------------|
| | | |
|-----------------------------------------------------------------------------------------------------|
|Provision for impairment and credit losses |6,316 |4,286 |
|-----------------------------------------------------------------------------------------------------|
| | | |
|-----------------------------------------------------------------------------------------------------|
|Net financial income before operating expenses |15,328 |11,644 |
|-----------------------------------------------------------------------------------------------------|
| | | |
|-----------------------------------------------------------------------------------------------------|
|Operating expenses |6,649 |5,263 |
|-----------------------------------------------------------------------------------------------------|
| | | |
|-----------------------------------------------------------------------------------------------------|
|Income before taxes |8,679 |6,381 |
|-----------------------------------------------------------------------------------------------------|
|Income tax expense |2,301 |1,651 |
|-----------------------------------------------------------------------------------------------------|
| | | |
|-----------------------------------------------------------------------------------------------------|
|Net income |6,378 |4,730 |
|-----------------------------------------------------------------------------------------------------|
| | | |
|Weighted average number |21,027,483 |20,762,396 |
|of outstanding shares at | | |
|year end | | |
|-----------------------------------------------------------------------------------------------------|
|Fully Diluted Basis |21,596,893 |21,254,508 |
|-----------------------------------------------------------------------------------------------------|
| | | |
|Net earnings per common share basic| | $0.233 |
| | | |
| | $0.305 | |
|-----------------------------------------------------------------------------------------------------|
|Diluted | | $0.223 |
| |$0.295 | |
-------------------------------------------------------------------------------------------------------
Key
Performance Measurement
Please note the Company annual
results as reported against the specific objectives
first press released on June 13, 2013.
-
1.Achieve record loan originations of over $120
million
Loan originations for the year
reached $126.22M, a new record. Achieved 105% of the target.
-
2.Achieve record finance receivables of over $192
million
Finance receivables for the
year grew to $199.62M from $147.53M, a new record.
Achieved 117% of the
target.
-
3.Achieve record revenue of over $30
million
Revenue for the year totalled
$30.26M, a new record. Achieved 101% of the target.
-
4.Achieve an annualized write off rate below
3.25%
Achieved average (12 month
rolling) credit loss rate of 3.28%. Target missed.
-
5.Achieve record earnings per share of
$0.300.
Earnings per share for the
year were $0.305, a new record. Achieved 102% of the target
---------------------------------------------------------------------------------
|Fourth Quarter Financial Highlights|For the three months ended |
|-------------------------------------------------------------------------------|
| |March |March 31, 2013 |
| |31, | |
| |2014 | |
|-------------------------------------------------------------------------------|
|($000’s, except | | | |
|ratios and per | | | |
|share) | | | |
|-------------------------------------------------------------------------------|
|Originations |40,025 |23,927 |New record -Increased 67%|
|-------------------------------------------------------------------------------|
|Total revenues |8,033 | |New record -Increased 26%|
| | | | |
| | |6,363 | |
|-------------------------------------------------------------------------------|
|Net income |1,732 |1,538 |New record -Increased 13%|
|-------------------------------------------------------------------------------|
|Earnings per share basic |0.083 |0.074 |New record -Increased 12%|
|-------------------------------------------------------------------------------|
|Average interest expense |5.11% |5.87% |New |
| | | |record–Improved |
| | | |by 0.76% |
|-------------------------------------------------------------------------------|
|Return on earning assets |3.71% |4.36% | |
|-------------------------------------------------------------------------------|
|Return on equity |40.47% |61.25% | |
---------------------------------------------------------------------------------
Fourth Quarter Results
Loan originations exceeded
$40.03M, compared to $23.93M in the prior year, a 67% increase, and
a 58% increase over the prior quarter of $25.28M.
Finance receivables increased
by $20.53M, or 11%, to $199.62M in the quarter from $179.09M in the
preceding quarter.
Rifco Fourth Quarter Comparative
Results
---------------------------------------------------------------------------------------
|Statements of income | |
| | |
| | |
| |For |
| |the |
| |quarters |
| |ended |
|-------------------------------------------------------------------------------------|
| |March 31, 2014 |March 31, 2013|
|-------------------------------------------------------------------------------------|
| ($, 000’s, except per share) | | |
|-------------------------------------------------------------------------------------|
| | | |
|-------------------------------------------------------------------------------------|
|Financial revenue | | |
|-------------------------------------------------------------------------------------|
|Interest and fee income |8,033 | |
| | |6,363 |
|-------------------------------------------------------------------------------------|
| | | |
|-------------------------------------------------------------------------------------|
|Financial expenses | | |
|-------------------------------------------------------------------------------------|
|Interest expenses |2,199 | |
| | |2,108 |
|-------------------------------------------------------------------------------------|
| | | |
|-------------------------------------------------------------------------------------|
|Net financial income before provision for impairment |5,834 | |
| | |4,255 |
|-------------------------------------------------------------------------------------|
| | | |
|-------------------------------------------------------------------------------------|
|Provision for impairment and credit losses |1,697 | |
| | | 905 |
|-------------------------------------------------------------------------------------|
| | | |
|-------------------------------------------------------------------------------------|
|Net financial income before operating expenses |4,137 |3,350 |
|-------------------------------------------------------------------------------------|
|Operating expenses |1,815 |1,335 |
|-------------------------------------------------------------------------------------|
| | | |
|-------------------------------------------------------------------------------------|
|Income before taxes |2,322 |2,015 |
|-------------------------------------------------------------------------------------|
| | | |
|-------------------------------------------------------------------------------------|
|Income tax expense |590 | |
| | | 477 |
|-------------------------------------------------------------------------------------|
| | | |
|-------------------------------------------------------------------------------------|
|Net income |1,732 | |
| | | |
| | | 1,538 |
|-------------------------------------------------------------------------------------|
| | | |
|Net earnings per | | $0.074 |
|common share basic| | |
| | $0.083 | |
|-------------------------------------------------------------------------------------|
|Diluted | | $0.071 |
| | $0.080 | |
---------------------------------------------------------------------------------------
Financial revenue in the
quarter was $8.03M, a 26% increase, over $6.36M in the comparable
period. Financial revenue increased by 4.4% in the current quarter
compared to the prior quarter on strong finance receivable
growth.
Interest expense in the
quarter was $2.20M compared to $2.11M in the prior year. Interest
expense as percentage of average finance receivables has continued
to decline quarterly. The average interest expense decreased to
5.11% from 5.87% in the same quarter of the prior year.
Net income in the quarter
increased to $1.73M compared to $1.54M in the prior year, a 13%
increase. EPS improved to $0.083 compared to $0.074 in the prior
year. In the comparable period the net income was positively
affected by a reduction in the provision for impairment
rate.
The Company has undertaken
many infrastructure, system upgrades and staffing increases in
anticipation of the loan origination growth that was experienced in
the quarter. These investments contributed to the 36% increase in
operating expenses over the comparable quarter and will provide for
capacity and efficiency improvements for future
quarters.
Operating expenses increased
to $1.82M from $1.72M in the prior period. The increase is
primarily related to staff increases in order to accommodate loan
origination growth.
The loan delinquency rate
decreased from 3.63% in the preceding quarter to 3.10%. The
annualized credit loss rate for the quarter was 3.38%.
In order to fund its loan
originations, the Company used its $100M bank syndication facility
and its $8M unsecured debentures. In addition, the Company has
access to $150M through three securitization facilities. The
Company's credit facilities have remaining capacity of $127M at
year end.
Rifco maintains strong funding
relationships and has been able to increase levels of funding
capacity as needed.
Rifco today filed its annual
financial statements and management discussion and analysis for the
year ended March 31, 2014. The previously released financial
statements and the related management's discussion and analysis can
be viewed at www.sedar.com or at
www.rifco.net.
Rifco's Annual Shareholders
Meeting will be held on September 4, 2014 at 3:00PM at the iHotel,
6500 - 67th Street, Red Deer, Alberta. We look forward to meeting
with our shareholders and interested parties to detail the 2014
results and share our vision for the future.
About Rifco
Rifco Inc. operates through
its wholly owned subsidiary Rifco National Auto Finance Corporation
in order to provide automobile loans through its dealership network
across Canada.
Rifco National Auto Finance
provides consumers with financing options on new and used vehicles.
Rifco specializes in building long-term partnerships with dealers
by investing time in personalized services through dedicated
account representatives. Rifco's quick credit decisions, common
sense lending, and expedited funding processes give its dealers
better financing options and more closed deals. Rifco's most
successful partnerships result in Fast Forward 500 Club status for
its loyal dealerships.
Rifco is committed to
continuing growth. Key strategies for achieving this growth include
the expansion of its automobile dealer base, excellence in credit
and collections processes.
The
common shares of Rifco Inc. are traded on the TSX Venture Exchange
under the symbol "RFC". There are 21.03 million shares (basic)
outstanding and 22.21 million (fully diluted) shares.
CONTACT:
Rifco Inc.
Lance A. Kadatz
Vice President and Chief
Financial Officer
Telephone: 1-403-314-1288 Ext
7007
Fax: 1-403-314-1132
Email:
kadatz@rifco.net
Website:
www.rifco.net
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: Rifco Inc.
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