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Kristaps Bergmanis

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ExpressCredit Group publishes financial forecast

ExpressCredit Group announces its current year financial estimate and two-year financial forecast. According to the financial plan, in 2019, the Group’s turnover will increase by 9% and consolidated net loan portfolio by 40%. ExpressCredit Group plans stable growth of ordinary business in mid-term.

 

Key figures, mln EUR

 

2018A

2019E

2020F

2021F

Net loan portfolio

 

20.2

28.2

34.8

37.4

Change, Y-o-Y, %

 

27%

40%

24%

7%

Turnover

 

18.9

20.6

22.0

23.7

Change, Y-o-Y, %

 

5%

9%

7%

8%

EBITDA

 

7.2

7.3

8.0

8.9

Change, Y-o-Y, %

 

26%

2%

9%

11%


 

Comment from Didzis Admidins, the CEO of ExpressCredit Group:
"This is the first time when SIA ExpressCredit provides financial forecast to our investors taking into account the market dynamics affected by regulation and competition, the Group’s historical performance and experience of the management. Having seen the actual financial results of seven months, in 2019, we are convinced that the net loan portfolio will increase by EUR 8 million and turnover by EUR 1.7 million compared to the audited consolidated results of 2018. As we have previously reported, the company has gradually raised the maximum loan amount and extended the range of offered loan repayment terms, which has contributed to the growth of the portfolio. We also expect that portfolio growth will be supported by lower interest rates as a result of legislative changes.

In the coming years, we will focus on activating existing customers as well as attracting new customers. We will continue to work on new product development, testing and implementation, thus increasing the group's profitability.

We expect the EBITDA to be close to EUR 9 million in 2021, the net loan portfolio to reach at least EUR 37 million and turnover to strongly exceed EUR 23 million. This published forecast is prudent, but we are working to outperform these results."

The forecast is based on the following assumptions and management vision:
1) legislative changes regarding restrictions on interest rate and advertising have been taken into account;
2) lending will increase as a result of changes in the sales approach;
3) the company’s consumer loan segment will grow faster than industry overall;
4) in the pawnshop segment, revenue will grow in line with the historical growth pattern;
5) in the consumer loan segment, revenues will both decrease due to lower interest rates and increase due to the introduction of longer repayment terms and new paid services;
6) the company will continue to efficiently use its resources to support its growth.

The forecast will be updated if it becomes very likely that the actual results will deviate from this forecast by more than 10%. For example, the financial forecast of the group may change if the management of the company decides to start providing services also outside Latvia (currently the core business of the group is performed only in Latvia).

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