Easyhome revenue climbs 11.3% in quarter
Michael J. Knell -- Furniture Today, November 21, 2013
MISSISSAUGA, Ontario - While the expansion of its short-term consumer loans business continued to be the primary driver of its growth in both sales and profit, Easyhome also reported strong growth in its core merchandise leasing business for the third quarter of 2013.
Revenue of C$54.9 million in the quarter was up 11.3% from the comparable period last year. Net earnings were C$3.8 million or 31 cents per share, compared with C$2.6 million or 22 cents per diluted share for the third quarter of 2012 - up 41% on a per share basis.
"We are delighted to report continued strong growth in revenue, operating income and net income," Easyhome President and CEO David Ingram said in a statement. "Our leasing business delivered a 14.3% improvement in its operating income while Easy financial's operating income increased 50%."
Excluding the impact of its Easy financial segment, same store revenue was up 7.7% in the quarter, which it said was driven mainly by the migration of lease portfolios from closed stores to nearby open locations as well as improved retail execution resulting from last year's restructuring efforts.
The company also said leasing's 16.6% operating margin for the third quarter was two points higher than for the 2012 period.
However, Easy financial continued to be the company's star performer, as its loans portfolio jumped 56% to C$92.8 million as 10 new standalone locations were added to the network.
"The ever increasing demand for Easy financial's loan products has given us the confidence to embark on a more aggressive growth plan for Easy financial," Ingram said, adding the company intends to make it Canada's largest alternative provider of financial services for cash- and credit-constrained consumers.
Ingram also announced the launch of a three-year growth plan - to be funded in part by a C$20 million equity financing bid that will close next week - which will see the number of standalone Easy financial locations nearly double, to approximately 225 from the 112 in operation at the end of September.
The company also expects to grow its consumer loans portfolio to C$250 million by the end of 2016.
For the first nine months of the year, Easyhome revenue was up 8.8% C$161 million and net income was C$9.8 million or 81 cents per share, compared to C$7.3 million or 61 cents per share - a gain of 32.7% on a per share basis.
Ingram also said the company will open between 30 and 35 new Easy financial locations in 2014 and aims to grow its loans portfolio to between C$145 and C$155 million.
In its leasing segment, the company expects to open two new Be-A-Contender franchise stores as well as three new franchises next year.
Based on these assumptions, Ingram said the company is targeting overall revenue growth of between 10% and 12% in 2014.
At the end of September, Easyhome operated a total of 235 Easyhome leasing stores, including some 52 franchise locations in both Canada and the United States as well as 112 Easy finanical locations.
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