Q2/22 operating EPS was ahead of forecast and completed a tuck-in marine and RV finance acquisition
TSX: ECN | CAD 6.67 | Sector Perform | Price Target CAD 7.50
Sentiment: Neutral
Our take: ECN reported Q2/22 basic operating EPS of US$0.09, which was ahead of our forecast and consensus of US$0.08
(consensus range: US$0.06 – 0.09). The slightly better-than-forecast EPS was driven by stronger-than-forecast performance at Triad and Source One.
ECN also announced it acquired Intercoastal Financial Group, LLC, a marine and recreational vehicle finance company for US $75MM (comprised of US$55MM in cash and US$20MM in deferred payments).
Further, ECN announced revised 2022 adjusted operating income before tax guidance:
• Triad - increasing to US$70-75MM from US$62-70MM
• Source One - increasing to US$13-15MM from US$12-14MM
• Kessler Group - decreasing to US$46-52MM from US$55-60MM
We are still reviewing the full financials, so we are not certain if there are any notable items. However, here are some key metrics from Q2/22 results:
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Manufactured Housing and RV & Marine (Triad Financial and Source One): Originations: US$613MM were ahead of our US$526MM forecast.
Ending managed assets: US$3.76B were ahead of our US$3.46B forecast. EBITDA: US$27.7MM was much better than our US$22.2MM forecast.
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Credit Card & Consumer Payments (Kessler Group):
Ending managed assets: US$28.0B were slightly below our US$28.4B forecast. EBITDA: US$13.2MM was below our US$14.0MM forecast.
Conference call today at 5:30pm ET; dial in: 1-800-319-4610. Link to webcast on the company’s website.