Powered by loans, Easyhome revenues grow 5.2%
May 15, 2013-- Furniture Today,
MISSISSAUGA, Ontario - Although most of its growth continues to come from its short-term consumer loans segment, Easyhome said first quarter deliveries in its core furniture, appliance and electronics leasing business were the highest they've been since the first quarter of 2007.
Total revenues in the quarter for Canada's largest rent-to-own merchant were C$52.4 million, up 5.2% from a year earlier, the company reported. Including Easyfinancial, same-store revenue was up 12%, compared with growth of 8.3% in the first quarter of 2012.
The Easyfinancial short term consumer loans operation saw revenue increase 44.4% to C$11.8 million over the same period last year, a result of the increase in its receivables portfolio from C$48.8 million to C$74.7 million.
The company's core merchandise leasing operations recorded revenues of C$40.1 million while its franchise network had revenues of C$400,000. Leasing revenues were negatively impacted by C$600,000 because the first three months of 2013 had three fewer trading days than the comparable period of 2012. Excluding Easyfinancial, same-store revenue was up 5.9%.
Easyhome President and CEO David Ingram told analysts in a conference call that unit deliveries to customers were up significantly in quarter, with gains of 5% in furniture, 12% in major appliances and 17% in consumer electronics. Same-store deliveries rose 10.2%.
Net income for the first three months was C$2.9 million or 24 cents per share, up 11% from the C$2.6 million or 22 cents per share a year ago.
"Our results for the first quarter continue the trend of increased revenues and improved performance," Ingram said. "The increase in earnings was driven by the growth in Easyfinancial services and by the improved results of our leasing business, which benefited from the restructuring activities and changes to our retail footprint which occurred last year."
He also said that the 15 stores acquired from Rent- A-Center at the beginning of the year have been successfully integrated into Easyhome's operation.
Ingram said the company plans to add at least 25 locations this year and expects its automated online transaction capability will have a soft launch sometime in the second quarter.
"This positions us to have a fully functional e-commerce platform by the end of this year," he said.
He added that Easyhome expects to have a loan book valued at between C$95 million and C$100 million by the end of the year, which would make it the largest provider of small consumer loans in Canada and the leading alternative to banks and payday lenders in this country.
"Our leasing business also continues to show solid consumer demand and we are on track for higher revenues and operating income for the ensuing quarters," Ingram said. "The company will focus on growing Easyfinancial, increasing the profitability of the leasing business and growing the franchise network."
As of March 31, Easyhome operated 191 leasing stores (including nine consolidated franchise locations), 100 Easyfinancial locations and 49 franchise locations, 16 in Canada and 33 in the U.S.