Investor Presentation - Small

Investor
Presentation
CARFINCO INCOME FUND
Toronto Stock Exchange: CFN.UN
Assured Automotive Financing
October 2010
2
Forward Looking Statements
This presentation contains certain statements that may be deemed "forward-looking
statements". All statements in this document, other than statements of historical fact, that
address events or developments that the Company expects to occur, are forward looking
statements. Forward looking statements are statements that are not historical facts and are
generally, but not always, identified by the words "expects", "plans", "anticipates",
"believes", "intends", "estimates", "projects", "potential" and similar expressions, or that
events or conditions "will", "would", "may", "could" or "should" occur.
Although the Company believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are not guarantees of
future performance and actual results may differ materially from those in the forwardlooking statements. Factors that could cause the actual results to differ materially from
those in forward looking statements include, failure to successfully negotiate or
subsequently close such transactions, inability to obtain required shareholder or regulatory
approvals, uncertainty with respect to findings under exploration programs and general
economic, market or business conditions. Investors are cautioned that any such statements
are not guarantees of future performance and actual results or developments may differ
materially from those projected in the forward-looking statements. Forward looking
statements are based on the beliefs, estimates and opinions of the Company's management
on the date the statements are made. The Company undertakes no obligation to update
these forward-looking statements in the event that management's beliefs, estimates or
opinions, or other factors, should change.
3
Highlights
A uniquely positioned, highly profitable auto finance income fund
Record earnings, strong loan originations, delinquencies
dramatically down, all growth targets being met.
Enormous untapped market potential
Technology drives operational efficiencies
Proven credit control
Reliable monthly cash distributions plus current quarterly special
distributions
Payout ratios expected to continue following Trust conversion
Highly motivated team; large insider ownership position
Growing capital markets awareness (2 analysts following)
4
Unit Price Chart
5
Carfinco is…
Growing its business of providing car loans
to “non-prime” credit applicants
June 30 finance receivables: $125.5 million, 13,450
customers
Providing unique program structure which aligns
customer, dealer and Carfinco interests
Allowing people the opportunity to purchase a vehicle
who otherwise wouldn’t be able to
Helping clients establish or re-establish credit score
Employing technologies to maximize operational
efficiencies
6
Carfinco’s Competitive Advantages
Strong management
Expertise
Ownership
Variable programs
Programs tailored to the varying needs of dealerships and
consumers
Barrier’s to entry
Experienced call center, customized software systems &
detailed monitoring of customer base
Vertically integrated
All key functions are internal: underwriting, account
management, inventory tracking, legal, collections,
skip tracing, repossession & re-sales
7
Carfinco is…
GEOGRAPHICALLY DIVERSE
1997 founded in Alberta. 1,200+ dealers in 9 provinces
43% franchised dealers & 57% independent used car dealerships
Geographically diverse portfolio - 53% West & 47% East
West – 53%
East – 47%
Carfinco’s Competitive Position
Customer Rating
8
A+
A
AB+
B
BC+
C
CD+
D
D-
9
Canadian Non-prime Market
BEACON SCORE AS A % OF THE CANADIAN CREDIT MARKET
Sources: Equifax Consumer Services & Informa Research Services, Inc.
45%
50%
3%
2%
Carfinco
Portfolio
10
Growing Loan Portfolio
FINANCE RECEIVABLES
($ MILLIONS)
125.5
108
113.2
2008
2009
94.4
76
61.1
2005
2006
2007
Q2 2010
11
Leads to… Growing Revenues
36.8
($ MILLIONS)
31.6
32.6
2008
2009
26.0
21.9
16.4
2005
2006
2007
Q2 2010
Annualized
Net Earnings & Distributable Cash
12
($ MILLIONS)
Net Earnings (Loss)
Distributable Cash
13
Leads to… Earnings Per Unit
QUARTERLY EARNINGS PER UNIT (dollars)
14
Impressive ROE
RETURN ON UNITHOLDERS’ EQUITY (PERCENTAGE)
15
Capital Structure
UNITS
Issued:
Insiders: free-trading
Public: free-trading
6,665,040
17,268,487
Total issued:
23,933,527
Fully diluted:
24,033,527
No unit option plan
No warrants
16
Why Carfinco?
1. Economic chaos drove new organizational efficiencies and
rejuvenated profitability
2. Cash distributions of 41.5 cents during the first 9 months of
2010
3. Distributions of 2 cents cash per unit per month in 2010
with potential quarterly special distributions
4. Distributions of 16.0 cents cash per unit for Q2 & Q3 2010
5. 72 cent per year earnings run rate based on Q2-2010
6. Five consecutive quarters of record net earnings
7. Board of Trustees intends to maintain a minimum 2 cent per
month cash distribution/dividend into 2011 and beyond
Investor
Presentation
CARFINCO INCOME FUND
Toronto Stock Exchange: CFN.UN
October 2010
For further information, please contact:
Mr. Tracy A. Graf
President and CEO
Telephone: 1-888-486-4356
Facsimile: 1-888-486-7456
Email: [email protected]