Government stimulus hurts Cash Converters lending business, online retail grows
Retailer and payday lender Cash Converters saw a spike in online demand during the last six months, with e-commerce sales up 39 per cent to $5.3 million.
Overall, however, the business’ revenue fell 31 per cent to $98.4 million, and EBITDA 19 per cent to $24.6 million.
“The performance of our underlying business model has been extremely impressive considering the substantial impact of Covid-19 throughout the first half of FY 2021,” said Cash Converters managing director Sam Budiselik.
“Each business unit that contracted in response to the stimulus provided by the government over the past 12 months ahs started the journey toward recovery. The closure of stores in response to the various lockdowns, whilst impacting normal operating revenue, resulted in a surge in online retail sales.”
According to the business, it didn’t receive any JobKeeper payments, though said economic support packages that were offered to workers, businesses and the broader community had a noticeable impact on its business – with less demand for credit felt due to Australians pulling money from their superannuation.
Looking forward, however, the business said it is in a strong position to leverage its extensive store and online network during the remainder of the 2021 financial year.
“A robust pipeline of potential store acquisition and development opportunities, supported by a storng balance sheet and cash flow, provides the company with a clear runway to grow in a measured, disciplined way,” the business said in a release to shareholders.