July 28, 2021
AS DelfinGroup publishes financial targets for 2024
Latvian financial services company AS DelfinGroup announces the financial targets for 2024. According to the plans, AS DelfinGroup looks to double the consolidated net loan portfolio by 2024, reaching 70 million euros. By increasing profitability, the Company plans to achieve profit before tax of 12.9 million euros in 2024. This announcement replaces any other forward-looking information provided by the Company.
In the coming years, AS DelfinGroup plans to grow faster compared to the market of non-bank consumer lending, reaching a 17% market share in 2024. According to AS DelfinGroup estimates and available information, in 2020 the Company's market share in the segment was 10%. The Company expects 8% annual growth in the overall non-bank consumer lending market in Latvia during the coming years. AS DelfinGroup plans to strengthen its market position in the pawnshop services segment and reach 42% of the total pawnshop loan market portfolio by 2024. According to the information available to the company, AS DelfinGroup’s market share in the pawnshop loan segment in Latvia reached 36% in 2020.
Chairman of AS DelfinGroup’s Management Board Didzis Ādmīdiņš: “DelfinGroup’s ambitious performance targets are based on our experience and rapid growth rates to date, supported by a sound business strategy and corporate governance in line with the best practices. In the second half of this year, we plan an initial public offering (IPO) of shares and admission to trading on the Nasdaq Riga stock exchange regulated market. A successful IPO will reduce the Company's financial costs. Raising additional equity will enable the Company to strengthen its market position, focus on the development of existing products, as well as develop new consumer lending products for various groups of society.”
Company’s financial targets for 2024 are based and valid for the assumption of EUR 10 million to EUR 15 million raised in the planned IPO process. The table summarises the audited results of AS DelfinGroup for 2020 and the Company's financial targets for 2024.Company’s financial targets for 2024 are based and valid for the assumption of EUR 10 million to EUR 15 million raised in the planned IPO process. The table summarises the audited results of AS DelfinGroup for 2020 and the Company's financial targets for 2024.
|Indicator*||2020 audited results||2024 targets|
|Net loan portfolio||EUR 34.6 million||EUR 70 million|
|Cost of interest-bearing liabilities||12.7%||<8%|
|Return on Equity (ROE)||44%||>30%|
|EBITDA**||EUR 9.3 million||EUR 17.6 million|
|Profit before tax||EUR 4.65 million||EUR 12.9 million|
|Dividend payout ratio||55%||>50%|
*APM (alternative performance measure), where calculations are based on Consolidated results: Cost-to-income ratio = ((Sales expenses) + (Administrative expenses) + (Other expenses (excluding Loss from cession of non-performing loans)) ) / ((Net sales) – (Cost of sales) + (Interest income and similar income) + (Other operating income) – (Interest expenses and similar expenses)), Cost of interest-bearing liabilities = weighted average nominal interest rate calculated by amount of interest bearing liabilities as at period end, Return on Equity (ROE) = (Net profit for the period) / ( ((Equity as at start of the year) + (Equity as at year end)) / 2), Equity ratio = (Equity)/(Total assets), EBITDA, Earnings before interest, taxes, depreciation and amortization = (Profit before tax) + (Interest expenses and similar expenses) + (Rights of used assets depreciation) + (Depreciation of fixed assets) + (Amortization), Dividend payout ratio = (Dividends paid during the period)/(Net Profit for the period).
**EBITDA source: Indicator for year 2020 according to Management report of audited AS DelfinGroup Consolidated Annual account for year ended 31 December 2020.
“The existing branch network is a solid foundation for serving a much larger customer base. As the Company's revenue grows, we plan to ensure higher overall efficiency and profitability of the Company. We project that by the end of 2024, the cost-to-income ratio will decrease below 45%. Based on the planned IPO and presence in capital markets, our target is to reduce the cost of interest-bearing liabilities to below 8% per year in 2024,” says Kristaps Bergmanis, Member of the Management board and Chief Financial Officer of AS DelfinGroup.
On 9 July 2021, AS DelfinGroup issued bonds via private placement in the amount of 5 million euros with an annual coupon interest rate of 9.75%, thus continuing to execute its long-term strategy. Demand for bonds exceeded the issue volume 1.85 times. The proceeds from the bond issue are used to refinance current liabilities, which will ensure a reduction in the Company's total funding costs.
In March of this year, AS DelfinGroup announced plans for an initial public offering (IPO) of shares in the second half of 2021. To find out more about this event, those who are interested are welcome to sign up for the news on the company's website: https://www.delfingroup.lv/invest
Established in 2009, AS DelfinGroup is a licensed holding company in the finance field, representing the brands Banknote, VIZIA and Rīgas pilsētas lombards. The company employs 277 professionals in 93 subsidiaries in 38 Latvian cities. AS DelfinGroup operates in the Latvian Chamber of Commerce and Industry and the Alternative Financial Services Association of Latvia and has earned Golden level status in the State Revenue Service cooperation programme. The net operating services of AS DelfinGroup are the sale of used goods in subsidiaries and on the internet, pawn loans, consumer loans and senior loans with special customised terms for seniors. AS DelfinGroup bonds are listed on the Nasdaq Riga First North. In 2020 the company had a turnover of 23.7 million euros, the loan portfolio reached 34.6 million euros, EBITDA increased to 9.3 million euros and earnings before tax reached 4.65 million euros. The calculated taxes of AS DelfinGroup in 2020 are 3.42 million euros.
Important. The information provided herein is not investment advice nor a proposal. This is only general information about the intention and plans of AS DelfinGroup in connection with the possible IPO process. All investment decisions must be based on a prospectus approved by the Financial and Capital Market Commission and professional assessment or advice.
Member of the Management Board of AS DelfinGroup
Phone: +371 29144168