Profit attributable to shareholders surges 80.9%
Interest income from mortgage business increases over three-fold
HONG KONG, May 23, 2014 /PRNewswire/ --
Financial Highlights
| Year ended 28 February | |||
| HK$'000 | 2014 | 2013 | Change |
| Turnover | 95,815 | 71,740 | +33.6% |
| Profit before taxation excluding listing expenses | 54,836 | 41,466 | +32.2% |
| Profit before taxation | 49,982 | 30,305 | +64.9% |
| Profit for the year attributable to shareholders of the Company | 41,076 | 22,706 | +80.9% |
| Net profit margin | 42.9% | 31.7% | |
| Earnings per share (HK cents) | 10.4 | 7.6 | |
| Dividend per share (HK cents) | 2.7 | -- | |
The board of directors of Oi Wah Pawnshop Credit Holdings Limited (HKEx stock code: 1319, the "Group" or "Oi Wah") announced its annual results and financial position for the year ended 28 February 2014. Profit for the year attributable to owners of the Company has surged by 80.9% and reached HK$41.08M (2013: HK$22.71M). The Board of Directors recommends a final dividend of HK$2.7cents (2013: Nil).
During the year, the Group recorded turnover of HK$95.82M (2013: HK$71.74M), representing an increase of 33.6%. The increase was attributable to increase of the Group's interest income earned on loan receivables in both of pawn loan and mortgage loan business. The profit attributable to shareholders was HK10.4 cents per share (2013: HK7.6 cents per share).
Business Review
Pawn Loan Business
During the year, the pawn loan business remained a major source of income for the Group. The interest income from the pawn loan business maintained stable and has slightly increased to approximately HK$56.8 million (2013: HK$56.7 million). The aggregated amount of pawn loans granted was HK$549.3 million (2013: HK$541.6 million) and the average amount of pawn loans granted increased was approximately HK$4,400 per transaction (2013: approximately HK$3,900 per transaction).
Although the total number of loans was less than last year, the interest income remained stable. This reflects there is an increase in the number of loans with larger transaction amount. The Group's successful listing and advertising effort has increased the demand for one-on-one pawn loan appointment services, which usually involve large transaction amounts.
Mortgage loan business
The mortgage loan business remains the Group's growth momentum. The business has continued to show rapid growth within the reporting period. Interest income from mortgage loan services increased significantly and reached approximately HK$37.5 million for the year ended 28 February 2014 ("FY2014") (2013: approximately HK$8.0 million), representing an increase of 368.8%. There were 197 new cases of loans in the reporting year, and the total amount of new mortgage loans granted surged from approximately HK$119.1 million for the year ended 28 February 2013 ("FY2013") to approximately HK$431.8 million in FY2014, representing an increase of more than 3 times. The increase was mainly due to the continuous expansion of the Group's mortgage loan portfolio.
Prospects
Looking forward, the Group will channel its resources and effort to business development and risk control. In terms of business development, the Group will invest capital in promoting Oi Wah's brand through various advertising channels, as well as employing more experienced personnel to further expand the mortgage loan business.
In terms of risk control, in view of the falling gold price, the Group will pose a more stringent control when granting loans. A more careful and conservative loan to value ratio approval will be applied. Moreover, the Group will consider cooperating with other financing service providers to jointly grant large amount of loans.
A series of actions has been taken in FY 2014 to optimise the financial structure of the Group, including placing, issuing of bonds and loans from ultimate holding company, to prepare for its future expansion. The mortgage loan business will take up a larger proportion of the Group's income in the coming year.
Mr. Edward Chan, Chairman and CEO of the Company, said, "We have great confidence in our Group's future prospects. Looking forward, we will position our Group to capture the high-end secured loan market and target on high net worth customer. In addition, we will continue to strengthen our Group's financial structure through negotiating better terms for bank facilities and other financing channels, so as to capture the opportunities lie ahead."