DFC Global Corp. Provides Update on Recent Business Developments
BERWYN, Pa.--(BUSINESS WIRE)-- DFC Global Corp. (DLLR), a leading international diversified financial services company serving primarily unbanked and under-banked consumers for over 30 years, is providing an update on a number of recent business developments.
The third-party national bank that funds the loans that are the basis of the Companys branded Military Installment Loan and Education Services, or MILES®, program, has sent a termination notice effective September 13, 2014, two years from now. As the Company has previously disclosed, it is in discussions with potential lending partners that the Company believes will more competitively underwrite the MILES program loans. These discussions are in advanced stages, and the Company believes that these new replacement arrangements will be in place later this fiscal year.
Additionally, on September 11, 2012, a bill was introduced in the Finland Parliament to restrict the interest rate on loans less than ¬2,000 to 50% APR. If approved by Parliament as drafted, this law would significantly restrict the Companys present internet-based short-term loan product in Finland. The Company generates approximately ¬25 million, or less than 3%, of its total consolidated revenues from unsecured short-term loans in Finland. The Company intends to continue to leverage the scalable technology platform and back-office support capabilities of its Finland based internet lending business by offering loans in other countries in Europe. The Company has already successfully leveraged the Finland platform by launching an internet loan product in Poland.
If the Company is not successful in replacing the current lending bank for its MILES loan program, or is not successful in adding other internet-based products in Finland, there is a possibility that future goodwill impairment charges could ensue.
Other Business Developments
The Company has recently expanded its loan collection facilities and automated dialer capabilities in the United Kingdom in anticipation of further growth of its store and internet-based short-term loan products in the U.K., Poland, and other new countries in Europe. In addition, the Company has recently expanded its business development function in Europe, which is responsible for developing, testing, and launching new products and services in the United Kingdom and Europe. This group has recently begun testing longer term loan products in the United Kingdom during the current quarter. The costs of these investments will be incurred during the first half of the current fiscal year, but are anticipated to translate into additional revenue and earnings growth in the second half of the Companys fiscal year ending June 30, 2013.
About DFC Global Corp.
DFC Global Corp. is a leading international diversified financial services company serving primarily unbanked and under-banked consumers and small business owners who, for reasons of convenience and accessibility, purchase some or all of their financial services from the Company rather than from banks and other financial institutions. Through its approximately 1,400 retail storefront locations, multiple Internet websites and mobile phone and other remote platforms, the Company provides a variety of consumer financial products and services in eight countries across North America and EuropeCanada, the United Kingdom, the United States, Sweden, Finland, Poland, Spain and the Republic of Ireland. The Company believes that its customers, many of whom receive income on an irregular basis or from multiple employers, are drawn to the range of financial services it offers, the convenience of its products, the multiple ways in which they may conduct business with the Company and its high-quality customer service.
The Companys products and services, principally its short-term single-payment consumer loans, secured pawn loans, check cashing services and gold buying services, provide customers with immediate access to cash for living expenses or other needs. The Company strives to offer its customers additional high-value ancillary services, including Western Union® money order and money transfer products, foreign currency exchange, reloadable VISA® and MasterCard® prepaid debit cards and electronic tax filing. In addition to its core retail products, the Company also provides fee-based services in the United States to enlisted military personnel applying for loans to purchase new and used vehicles that are funded and serviced under an exclusive agreement with a major third-party national bank through the MILES program.
The Companys networks of retail locations in Canada and the United Kingdom are the largest of their kind by revenue in each of those countries. The Company believes it is also the largest pawn lender in Europe by revenue. At June 30, 2012, the Companys global retail operations consisted of 1,399 retail storefront locations, of which 1,345 are company-owned stores, conducting business primarily under the names Money Mart ®, The Money Shop®, Insta-Cheques®, Suttons and Robertson®, The Check Cashing Store ®, Sefina®, Helsingin PanttiSM,Optima®, MoneyNow!®, and Super Efectivo®. In addition to its retail stores, the Company also offers Internet-based short-term single-payment consumer loans in the United Kingdom primarily under the brand names Payday Express® and PaydayUK®, in Canada under the Money Mart name, and in Finland, Sweden and Poland primarily under the Risicum® and OK Money® brand names. For more information, please visit the Company's website at www.dfcglobalcorp.com.
This news release contains forward-looking statements, including, among other things, statements regarding the following: current investments in the U.K. and Europe and their expected benefits, new lending partners for the MILES program, and the expected benefits of such arrangements; pending or recent acquisitions and their expected benefits; the Companys future results, growth, guidance and operating strategy; the global economy; the effects of currency exchange rates on reported operating results; the regulatory environment in Canada, the United Kingdom, the United States, Scandinavia and other countries; the impact of future development strategy, new stores and acquisitions; litigation matters; financing initiatives; and the development and performance of new products and services. These forward-looking statements involve risks and uncertainties, including risks related to: the regulatory environments; current and potential future litigation; the successful negotiation of acceptable terms of any new MILES program arrangements; the identification of acquisition targets; the consummation of pending acquisitions, the integration and performance of acquired stores and businesses; the performance of new stores; the impact of debt and equity financing transactions; the results of certain ongoing income tax appeals; the effects of new products and services on the Companys business, results of operations, financial condition, prospects and guidance; and uncertainties related to the effects of changes in the value of the U.S. Dollar compared to foreign currencies. There can be no assurance that the Company will attain its expected results, successfully consummate pending acquisitions, successfully conclude negotiations with business partners, successfully integrate and achieve anticipated synergies from any of its acquisitions, obtain acceptable financing, or attain its published guidance metrics, or that ongoing and potential future litigation or the various FDIC, Federal, state, Canadian, U.K., Scandinavia, European Union, or other foreign legislative or regulatory activities affecting the Company or the banks with which the Company does business will not negatively impact the Companys operations. A more complete description of these and other risks, uncertainties and assumptions is included in the Companys filings with the Securities and Exchange Commission, including those described under the heading Risk Factors attached as an exhibit to the Companys Current Report on Form 8-K filed with the Securities and Exchange Commission on April 9, 2012 and its Annual Report on Form 10-K for the Companys fiscal year ended June 30, 2012. You should not place any undue reliance on any forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.
Julie Prozeller / Amy Pesante
Source: DFC Global Corp.Copyright Business Wire 2012