Post by
Nashville35 on Dec 06, 2021 9:08pm
outlook for 22 shud be + w/higher dividend
on nov 30, chw filed a Short Form Base Shelf Prospectus on sedar for up to $500million. this doesn't mean this will be executed upon and no issuance has been announced, but provides flexibility to move quickly in next 25 months (term of the prospectus) if opportunity appears. covers differing types of instruments, incuding Debt Securities (unsecured),Common Shares, Warrants, Subscription Receipts, and Units.
likely once chw is happy that its infrastructure (people, technology, risk practices) can manage more throughput, layering in additional acquisitions prob happens (or has already started). vault and rifco both small-ish. with rifco acquisition, this will mean no more public company costs for rifco/reduced overhead (savings of +500k-$1million), access to more funding at lower costs, and being part of larger company may allow for more car dealer penetration (assuming rifco small size held back penetration at larger dealer chains) . gross finance receivables of $326 million in latest quarter for rifco already not small, but still just fraction of cdn market. this shud be really accretive for chw.
tandem finance in US seems growing a lot and addressable market is large , since target vendor small ticket (rather than pawnee third party small ticket). has longer sales cycle, but partnerships with vendors and distributors much longer and steadier. which is in line with every other step this new management team has taken (more predictability and stability in the business, which helps on the funding side and to potential new shareholders) to make chw a better business. annual originations in vendor small ticket estimated by chw to be 5x larger than third party small ticket. tandem already 27% of US receivables book by end of 3Q/2021, which is us$176million. only 30 employees since piggy back on parts of pawnee admin.
some of tandem vendor partner programs look v good. one is well respected urgent care clinics. now at 250 clinics, targeting up to 500 clinics by 2025 and tandem providing funding for the franchisees. imo, vendor partner programs better business than the traditional third party small ticket.
https://www.equipmentfa.com/news/33372/tandem-finance-partners-with-america-family-care-on-franchise-funding
https://afcfranchising.com/blog/american-family-care-franchise-on-franchise-500-list/
chw +$20 stock by end of 2022 imo.