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Axis Auto Finance Kicks off Q1 F2019 with 213% Earnings Increase

Stockhouse Editorial
0 Comments| December 4, 2018

The end of 2018 is looming and Axis Auto Finance Inc. (TSX:V.AXIS, Forum) is heading into 2019 on solid footing. Click to enlarge

The Company has been posting steady growth over the past year and its latest announcement is no different. Revenues increased 290% for Q1 fiscal 2019 to $8.4 million, up from Q1 2018’s $2.2 million. This equates to an annualized revenue run-rate of $33.7 million. On top of this news, Axis also recorded adjusted earnings of $1.6 million in the first quarter of 2019 compared to $0.5 million made in 2018’s first quarter - a 213% increase.

Axis now trades at just 6x P/E despite posting 200%+ YoY growth rates.

Portfolio yields continue to be strong for Axis, reporting at 35.3% for Q1 2019, consistent with 2018 which was 35.7%. The Company’s annualized credit loss rate is also maintaining its strength, holding steady at 6.96% in Q1 2019, down from 7.23% in fiscal 2018. Adjusted EPS was $0.017 for the quarter or approximately $0.069 on an annualized basis. The average Internal rate of return on new origination for Q1 2019 beat management expectations at 32%.

Originations were $18.2 million for the quarter, compared to $5 million a year ago. The Company adopted IFRS 9 Financial Instruments in this quarter, which increased the size of the allowance for credit losses that it maintains on its balance sheet from $2.5 million in June to $9 million in September. Net finance receivables therefore decreased from $109 million to $107 million over this time, though the portfolio has grown. This had no effect on credit performance or cash flows. Axis’ book value was $36.8 million as of September 2018, post a one-time reduction of $4.3 million to retained earnings, due to the adoption of IFRS 9.When Stockhouse last covered Axis, much of this growth was thanks to its expansion efforts into western Canada, with a new office in Edmonton, coupled with two major acquisitions, effectively buying subsidiaries in the Maritimes and Ontario.

FULL DISCLOSURE: Axis Auto Finance Inc. is a paid client of Stockhouse Publishing.


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