q2 another solid qtranother good q for chw - adj ebitda moves up from $19.1m in q1 to $23.1m in q2/22 and vs $11.3m last year q2/21. now a $2.5b loan book business. record originations.
free cash up $0.5m vs march to $15.7m ($0.75/sh) and vs $8.1m last year q2. max permitted dividends are 90% of trailing 4q fcf avg ($11.3m), so only paying 15% of fcf out based on q2 fcf and 21% of trailing 4q fcf avg. don't expect to change given backdrop but interesting where dividend could go 2-3 yrs forward.
did almost $100m in origination biz with new private equity partner, which requires no balance sheet risk and helps roe (no capital risked). expects to maintain that pace thru remainder of yr.
acknowledged interest rate hikes and are adjusting pricing. will slow originations while economic landscape still unknown re: recesssion or not. build balance sheet strength. seems common sense moves given unknowns.
credit still looks good (delinquencies, writeoffs, etc).
completing a ~$350m abs, about same size as last fall. expected to close early august. dbrs issues performance analytics on last year abs, shows performing well and cnl (losses) well below estimated levels by dbrs when first assessed. new abs has lower estimated cnl while mix of loans skews somewhat downmarket. all docs found at :
https://www.dbrsmorningstar.com/search?query=pawnee&docTypes=commentary,industry-study,methodology,performance-analytics,newsletter,pre-sale,press-release,rating-report,ranking-report,interview,webinar,other&document_tags=®ions=&countries=§orIds=&issuerIds=&issuedBy=&endorsement=&date=&archived=false&sort=recent&docPageNum=0&issuerPageNum=0
the link below is interesting study in terms of performance of equipment leasing abs during the financial crisis of 2008-2011 and how performed better than most other types. good document.
https://www.store.leasefoundation.org/cvweb/Portals/ELFA-LEASE/Documents/Products/SecuritizationReport.pdf
still have good liquidity left on various funding lines.
still hidden jewel in cdn small cap market imo. mkt cap only $20m more than 2017-2019 levels ($10-11/share), despite almost double roe, more sophisticated treasury mgmt, more than double loan book, more prime credits, more diversification across industry and geography, etc. investors running scared everywhere cause of macro but still opportunities in cdn market imo for patient.