Cash Store reports big increase in Q2 profit
EDMONTON — Lender of last resort The Cash Store Financial Services Inc. (TSX:CSF) announced Wednesday it was boosting its dividend after reporting a major increase in second-quarter profits.
The company, which operates under the banners The Cash Store and Instaloans, said second-quarter net income increased 27.9 per cent to $5.5 million or 32 cents a share in the quarter ended Dec. 31.
That compared with earnings of $4.3 million or 23 cents a share in the year-earlier period.
Revenue for the quarter was a record $42.3 million, up 14.3 per cent from $37 million in the year-earlier period.
The company declared a quarterly dividend of 10 cents per common share, up 3.5 cents or 54 per cent from the same quarter last year.
“The second quarter was notable for the achievement of record levels in revenue and branch operating income, and growth in diluted earnings per share of 39 per cent relative to the same quarter last year,” said chairman and CEO Gordon Reykdal.
Reykdal noted that many provinces have recently implemented consumer protection measures for the payday loan industry, including rate caps and a ban on rollovers.
“To date our experience has been that we have been able to accommodate new industry rules,” he said. “We have not experienced any material negative impacts as a result of regulation and we do not anticipate negative impacts in the future.”
The company said same branch quarterly revenues for the 383 locations open since the beginning of the second quarter of fiscal 2009 increased 7.3 per cent to $99,900.
The overall branch count was 469, up 54 net new branches from 415 as of Dec. 31, 2008, with 18 net new branches opened in the quarter.
The Cash Store and Instaloans act as brokers to facilitate payday advances to consumers who may not be able to obtain them from traditional banks.
Its shares were up 74 cents of more than seven per cent at $11.24 in trading Wednesday on the Toronto Stock Exchange.
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