Cash Converters scaling back UK venture

cash convertersCash Converters reported a $15.9 million first-half net profit after having suffered a $5.3 million loss in the previous corresponding period.

The payday lender and secondhand goods retailer also announced it will restructure its UK operations and will wind down its car leasing arm, Carboodle, as it tries to focus on its highest-returning activities.

The company has also mentioned they plan to use their 25-per cent interest in Cash Converters New Zealand as a platform for future growth in that market.

The company reported revenue of $198.6 million, representing a 5.8 per cent increase from the prior corresponding period, which was $187.7 million. The increase was boosted by the company’s Australian operations which the company says they will target for future growth.

“Our latest financial results confirm our strength in Australia across retail and financial services,” said Cash Converters MD, Peter Cumins.

Cumins asserted the company’s Australian operations have ‘leading market share and brand recognition,’ which will be the focus of future investments. The company announced it will broaden its current lending product range with the introduction of medium amount credit contract loans.

In the UK, Cash Converters will “go back to the basics” and return to its original role as a master franchisor, the company announced. It is currently negotiating to sell its corporate stores to franchisees within network and will also divest the UK personal loan book.

In Australia, the company will wind down Carboodle as the business looks to transition to a new secured motor lending business, Green Light Auto Finance. nThe company’s charges relating to the changes in its UK and Carboodle business are expected to be included in their full-year results. Cash Converters will pay an interim dividend of two cents, fully franked, on April 29 to shareholders on the register at the close of business on April 15.

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