Cash Converters (CCV)

[tommy]

I'm tempted to buy CCV shares but before taking the plunge and making a fool of myself, I would like to get a second opinion from much more experienced traders here!

Does anybody have an opinion on this company?

Challenger Financial Services has a stake in it, but I wonder whether this is of good value[?]

[KD]

wait for it, wait for it - if I'm any good at guessing Robbo will have a full page of comments on CCV at any tick of the clock complete with a copy of these comments and newly found fonts ..........

[mark100]

Management did not seem very upbeat in their recent outlook although the stock seems fairly cheap fundamentally. I recently sold at 29c but may consider buying in the low 20's if it was to fall. The main driver of growth seems to be their personal finance division.

cheers
mark

[mark100]

Might be worth watching again. Made an 8 year high on Friday

[robbo]

Cash Convertors...(CCV)

Having overviewed the Anual Reports and the numbers....

and also the mgt credentials -- what credentials?

and from other sources.....

Would not PERSONALLY.... touch CCV with a Barge Pole....even a very ..... long barge pole...

Regards,

robbo

[mark100]

Oh well, its up 19% since my post.

I don't really care how they make their profit, I was simply pointing out that they had made an 8 year high which in my opinion made it worth a mention

[wns]

I recently bought some of these & they are one of my picks in the 2008 comp.

Current market cap is $92.4m at today's close of 38cps.

Directors estimate npat for FY08 of $14.5 to $15m, so currently on estimated forward PE of 6.2 - 6.4. NPAT for FY07 was $11.56m.

Should pay dividend of 3cps for FY08, so current dividend yield is 7.9% fully franked.

Net profit margin has increased for each of the last years, from 15% to 30%.

ROC and ROE were 17% and 17.1% respectively for FY07 on shareholder's equity of $68m.
This compares to 34% on shareholders equity of $8m for FY03, with shareholder's equity increasing and ROC & ROE generally decreasing between these years.

Share price has fallen from highs of 78c within the last year. I think this is mostly due to recent legislation limiting interest rates on micro-lending to 48% in most states. Taking this into account, the company has reiterated npat of $14.5-15m for FY08 and very conservatively $12m+ for FY09.

EBIT as at the end of October was $7.01m which puts them on track for their FY08 profit target.

The company has plans to purchase more franchised stores in the short - medium term, growing the number from 20 to 50. They purchased 13 stores in 2007. They expect to pay a multiple of 3-4 times EV to purchase franchise stores going forward, paying for the purchases using a combination of debt and capital. Currently have debt of just $1.5m with $14.75m cash in the bank as at June 2007.

They have 500+ stores in their network, operating primarily in Australia and the UK.

The company has recently announced that as of December 10th, for up to the next 12 months they will buy back up to 10% of their shares when considered appropriate.

Anyone else hold or follow CCV or have any thoughts they'd like to share?

[STRAT]

The main driver of growth seems to be their personal finance division.

cheers
mark

Would their customers in this area be of similar calibre to all those defaulting on their sub prime loans

[Steve]

Anyone else hold or follow CCV or have any thoughts they'd like to share?

Are the Cash Converter stores in NZ part of the same company, or is it like a franchise arrangement? The Dunedin Cash Converters is no longer Cash Converters...

[wns]

Are the Cash Converter stores in NZ part of the same company, or is it like a franchise arrangement? The Dunedin Cash Converters is no longer Cash Converters...

Yes the Cash Converters stores in NZ are tied to CCV.

The company has 500+ stores in its network. CCV owns 20 of these stores, most are franchised, and quite a few are sub-franchised, whatever that means.

I had a look on their NZ website and Dunedin wasn't listed on their store locator.

STRAT - I suspect most of their customers don't even own a house. The company started when the founder opened the first store in 1984, so they've been in business for a long time. So I'm not too worried about the sub-prime situation in the US. They have a certain % of loans that don't work out, but this would always be the case.


For the period of a year, whether in $ terms or just on paper, I'd much rather own a company like this which actually makes a profit, rather than a highly speculative company with $0 revenues, that could go -90% or +500% in its SP.