Easyhome sets new highs for sales, earnings
August 1, 2014-- Furniture Today,
MISSISSAUGA, Ontario — Rocket-fueled leaps in its short-term consumer loans segment drove Easyhome to record highs for both revenue and earnings for both the second quarter and first half of 2014. Indeed, this was at least the eighth consecutive quarter of revenue growth for this country’s largest furniture, mattress, major appliance and consumer electrons leasing specialist.
Revenue was C$63.2 million, up 17.6% from the same period in 2013. Same-store sales growth was 19.7%.
The company attributed the revenue and earnings growth to the expansion of its Easyfinancial segment and the growth of its consumer loans receivable portfolio.
Net income for the period was C$4.5 million or 33 cents per share, compared to C$3.1 million or 26 cents per share — an uptick of 27% on a per share basis.
“Easyhome delivered record revenues and its best second quarter financial performance in the company’s history,” David Ingram, Easyhome’s president and CEO, said in a statement. “Easyhome leasing continued to generate solid earnings and cash flows while Easyfinancial grew revenues and operating earnings by expanding its consumer loans receivable portfolio.”
During the second quarter the consumer loans receivable portfolio grew C$21.9 million and stood at C$145.4 million on June 30, 73% higher than the C$83.9 million a year earlier.
Revenue from Easyfinancial — which also opened 11 locations during the period – was C$23.3 million in the second quarter, up 74.8%.
Meanwhile, revenue from the merchandise leasing segment was down 1.2% to C$39.9 million. However, same store sales growth was 2.7% as underperforming stores were closed and their leases transferred to nearby outlets.
Earlier this week, Easyhome announced it has obtained a new C$200 million credit facility that should support the expected growth of Easyfinancial through to the end of 2015.
For the six months ending June 30, Easyhome recorded revenues of C$123.6 million, up 16.4% from the first half of 2013.
Net income for the period was C$9.2 million or 66 cents per share, up 32% from a year earlier.
Revenue from Easyfinancial was up 72.2% to C$43.3 million, while leasing revenue was C$80.2 million, down 0.9%.
While he didn’t go into great detail, Ingram announced the company will launch a new master brand to support all of its business units on September 15 and will shift its advertising focus from print to television and online. The campaign will represent an investment of between six and eight cents per share for the third quarter of 2014 — about C$8 million. Advertising expenditures will return to their normal levels in the fourth quarter.
“The master brand strategy has been carefully planned over the last nine months,” Ingram said in a conference call. “The shift in marketing spend from flyer-based activity to digital and television content represents a major change in our spend allocation to promote our omni-channel strategy. In addition, it complements our commitment to be Canada’s largest provider of consumer loans as an alternative to traditional banks and payday lenders.”
Easyhome is now anticipates its loan book will be valued at between C$180 and C$190 million by the end of 2014 and its previous target of $250 million by the end of 2016 will be reached by the end of 2015 — a full year ahead of schedule. The book should be valued at between C$320 and C$350 million by the end of 2016.
This has prompted Easyhome to revise its revenue growth targets for 2014 to 14% to 16% from 10% to 12%.
At the end of the first half of 2014, the company operated 238 Easyhome leasing stores, including 69 franchises in Canada and the United States, as well as 139 Easyfinancial locations.
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