Cash Converters expects to improve its performance in the year ahead after changes to micro credit rules impacted its annual profit.
Cash Converters is expecting a stronger year ahead after new regulations on lending hit its earnings.
The pawnbroker and financial services company’s annual profit fell 26 per cent to $24.2 million in the year to June 30, which it said was partly due to changes to micro-finance regulations in the first half of the year.
But earnings from its financial services products, which are its main profit driver, improved in the second half of the year.
“Following the transition to the new micro credit regulatory regime in Australia we are confident that we will see the improvement we experienced in the second half continue into the 2015 financial year,” Cash Converters said.
Its stores also performed well in the second half of the year, and can be expected to continue to grow earnings in the current year, Cash Converters said.
It recently bought three franchised stores in Queensland, which it expects will aid that growth.
Cash Converters in Australia had personal loans worth $109 million at June 30, and issued $239 million in cash advances in the year to June.
Its shares dropped 2.75 cents, or 2.4 per cent, to $1.1275.
LENDING RULES CHANGES HIT CASH CONVERTERS PROFIT
* Net profit of 24.2m, down 26 pct from $32.9m in 2012/13
* Revenue of $331.7m, up 22 pct from $272.7m
* Final dividend of 2 cents per share, unchanged