• Transitioning to lower-cost, longer-term lending solutions
• Scaling sustainability and luxury goods focus
• Strategic store acquisitions delivering strong returns

Cash Converters International, a global retailer and non-bank lender, is presenting at the Shaw & Partners Small Cap Financials Conference. The company has a rich history, having started in Perth, Western Australia, in 1984 and grown to a network of over 768 stores across 21 countries. Over the years, Cash Converters has continuously reinvented itself, expanding from second-hand goods and pawnbroking to personal loans, vehicle loans, and now a focus on lower-cost, longer-term lending solutions. The company is transitioning away from small loans to better serve its sub-prime and near-prime customers, leveraging its proprietary machine learning credit risk models to process around 780,000 loan applications annually. Cash Converters is also scaling its sustainability efforts, with over 1.7 million items repurposed annually in Australia, and shifting its inventory focus towards luxury goods, opening a new luxury-focused retail store in Bondi Junction that is performing well. The company is executing a growth strategy centered on strategic store acquisitions, with a focus on franchise stores in Australia and the UK. These acquisitions are priced at less than 5 times EBITDA and are expected to deliver an IRR of over 15%, with earnings accretive from day one. Cash Converters is committed to growing earnings and paying consistent dividends, with a 24% increase in 1H FY25 Operating NPAT and a fully franked dividend of 1 cent per share.

Cash Converters reported the following key financial metrics for 1H FY25: Revenue of $192.1m, Operating EBITDA of $36.5m, Statutory NPAT of $12.1m, Gross Loan Book of $277.4m, and Cash & Equivalents of $57.3m. The company also has $68.5m in undrawn securitisation funding available.

Cash Converters is focused on pivoting its business model to lower-cost, longer-term lending solutions, scaling its sustainability and luxury goods offerings, and executing strategic store acquisitions to drive growth. The company sees significant opportunities in the sub-prime and near-prime lending market in Australia, estimated at $5 billion in credit applications per year, and is leveraging its proprietary machine learning credit models to capture this market.