Revenue Up, Costs Down; Canadian Auto Lender Even Stronger

The Company recently announced that it has closed its new $100 million senior secured revolving debt facility. This brings a 46% reduction in the cost of senior debt to Prime Rate plus 2.25%, while also more than doubling the size of the facility from $40 to $100 million.

Axis also released its financial results for the Q2 F2019 ending December 31, 2018. The highlights were: record adjusted earnings of $2.0 million in first half of 2019 compared to $0.9 million in the first half of 2018 and quarterly revenues of $8.1 million compared to $2.2 million a year ago.

Both news items demonstrate the Company’s stability and successful efforts to continuously improve its bottom line.

Stockhouse recently caught up with Company CEO, Todd Hudson, to gather further details on this recent news for investors.


Axis Auto is already the fastest growing publicly-traded alternative auto finance Company in Canada. What can the Company do with this new, more than twice the size, credit facility?

Take more market share from the competition and continue to add to the bottom line. The interest savings will be an immediate boost and the size of the facility gives us plenty of runway for growth.


Already a successful business, Axis has recently expanded across the country, why is that important?

Having a nationwide presence allows us to increase originations by tapping into new markets. We expect especially Western Canada and Quebec to be major contributors to portfolio growth.


Now that Axis is more easily able to grow its portfolio with this financing, what is new on the Company’s agenda?

We are actively working on further improving efficiencies to grow the bottom line. Implementation of a new IT platform is underway as well as several other technology initiatives.


Through this financing, Axis simultaneously decreases its costs while increasing its leverage, how does this higher loan-to-value ratio allow the Company to enhance its lending capacity?

We are very comfortable with the current leverage ratio and the biggest advantage is that we won’t need additional equity to utilize the $100 million. That should create immediate shareholder value.


For your clients looking for loans, does financing with Axis provide an improvement to their credit scores?

Absolutely. We report each loan to the credit bureau and installment loans, including auto, are the best way to build credit. The vast majority of our customers are able to improve their credit score over the duration of their loan.


Turning to your recent financial results for Q2 F2019, what were the main contributors to the higher earnings?

Certainly, size matters in this business. Having the ability to take advantage of operational leverage helped us grow earnings. And we have only scratched the surface, there is a lot more growth to come.


Portfolio yields maintained strong levels and credit loss ratio remained stable, what should the big takeaway be from this?

The big takeaway is that we are able to grow without sacrificing yield or increasing loss ratios. That’s a lot harder than it sounds, but we figured out the right formula and are continuing to execute.


Anything else you wish to add for our readers?

Only that the best is yet to come… Axis is at a pinnacle of its development and continues to grow and become more efficient. And there is no doubt in my mind that it will be soon reflected in our stock price. Axis is well on its way to becoming the largest independent finance company in Canada!


FULL DISCLOSURE: This is a paid article by Stockhouse Publishing.