Cash Converters International scoops up New Zealand Master Franchisor for $15.5m
Cash Converters International continues to assess acquisition opportunities that will provide more value to shareholders.
As part of its expansion strategy, Cash Converters International (ASX: CCV) will acquire the remaining equity in Cash Converters New Zealand Master Franchisor for $15.5 million in cash.
Cash Converters International already has a 25% stake in the New Zealand entity and the remaining 75% will be secured for $15.5 million using available cash reserves.
The acquisition is expected to be completed by the end of the year.
“We are particularly excited to announce the agreement on terms to acquire the remaining 75% of our New Zealand Master Franchisor, allowing us to fully integrate the Cash Converters brand, stores, and people in New Zealand into our wider corporate operation,” Cash Converters International managing director Sam Budiselik said.
“I would like to take the opportunity to thank the New Zealand team for the investment made in our brand over nearly 30 years and the commitment shown to establishing a successful and profitable store network.”
Mr Budiselik said acquiring the New Zealand franchise brings with it an experienced management team that will remain with the business and underpin further growth.
Further acquisitions
In addition to acquiring the New Zealand franchise, Mr Budiselik said Cash Converters International was continuing to evaluate “sensible opportunities” to generate value for shareholders.
As such the company, is also reviewing other domestic and international franchise targets to fast-track its expansion strategy.
To fund its acquisitions, Cash Converters International posted a 22% increase in revenue for FY2022 ended June to $245.9 million.
This resulted in an operating net after tax profit of $19 million for the period – up 26% on FY2021.
In addition to acquisition targets, the company is focusing on converting some of its existing stores in Australia to smaller footprints, while negotiating lease reductions for others.
Cash Converters International has also made “significant investment” in its key digital assets in recent years.
More than 60% of loan outgoings and 18% of retail turnover are now online.
Growing loan books are expected to continue generating earnings momentum.