We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
IOU Financial Inc | TSXV:IOU | TSX Venture | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.22 | 0.215 | 0.235 | 0 | 01:00:00 |
Company highlights strong year over year growth in loan originations, return to profitability on an annual basis, and provides update on Post-Pandemic Growth Plan.
MONTREAL, April 27, 2022 /CNW/ - IOU FINANCIAL INC. ("IOU" or "the Company") (TSXV: IOU), a leading online lender to small businesses (IOUFinancial.com), announced today its results for the year ended December 31, 2021.
"IOU Financial delivered on its 3 main goals for 2021: growing loan origination volumes to pre-pandemic levels, achieving a return to profitability on an annual basis, and laying the groundwork for scalable growth for years to come," said Robert Gloer, President and CEO. "We are proud of the team's performance in 2021 and even more excited about the opportunities ahead."
IOU Financial originated a total of US$161.5 million in loans in 2021, representing an increase of 90.3% over the previous year, surpassing pre-pandemic levels and establishing a new high-water mark in its 12-year history. The Company attributes a significant portion of its strong growth in loan originations to its successful transition from a balance sheet strategy (under which the Company traditionally funded loans to its balance sheet) to a marketplace strategy under which new loan originations are primarily being sold to institutional purchasers.
"IOU's marketplace strategy allowed the Company to originate significantly more volume in 2021 than would have previously been possible under the financial limitations of a balance sheet strategy," added Gloer. "This has proven to be a win-win that has in turn given us the financial latitude to repurchase approximately $3.7 million in convertible debentures in 2021 and invest in strategic growth initiatives as part of our Post-Pandemic Growth Plan."
Operating expenses, on an adjusted basis, increased 15.9% to $11.0 million in 2021 vs. 2020 by investing in innovation and resources as part of its Post-Pandemic Growth Plan.
"Our investments in strategic growth areas were designed to lay the groundwork for future growth and scalability, and we already started to see the initial benefits of these investments in 2021.", added Gloer.
The Company's Post-Pandemic Growth Plan, first announced as part of its Q1 2021 Financial Results, is based on 3 strategic pillars that lay the groundwork for future scalability and growth:
IOU Financial's strong 2021 loan originations and progress towards its strategic goals demonstrate the Company's ability to continue capitalizing on the economic recovery and create value for investors by capitalizing on its marketplace strategy and investing in areas that support scalable growth.
OUTLOOK
In the first quarter ending March 31, 2022, IOU originated US$59.6 million in loans and set a new quarterly loan origination record in its history. For all of 2022, the Company is targeting loan originations in the range of US$220M to US$260M while continuing to invest in growth and scalability.
FINANCIAL HIGHLIGHTS
The Company continues to focus on its marketplace strategy allowing it to accelerate loan origination growth. This strategy has the impact of placing more emphasis on servicing and fee revenue over interest revenue and cost of revenue associated with holding loans as part of a loan portfolio. Interest revenue decreased as the principal loan portfolio balance continues to wind down while servicing and fee revenue increased consistent with the increase in loan origination volume as well as the increase in the servicing portfolio.
Due to the wind down of the loan portfolio, there is nominal interest expense associated with the financing credit facilities in 2021 as IOU's two financing credit facilities were terminated in December 2020 and October 2021, respectively. Interest expense has decreased in 2021 as the Company was able to use its financial resources to repurchase approximately $3.7 million its convertible debentures in 2021.
In addition, the marketplace strategy will render the provision for loan losses irrelevant and IOU will continue to focus on cash collections on the remaining portfolio which may give rise to reversals in the provision for loan losses and recoveries of loans previously written off.
Please refer to the table below for adjustments made to IFRS gross revenue and operating expenses in order to better reflect the actual operating performance of the business.
Loan Originations: In 2021, the Company funded US$161.5 million in loans (2020: US $84.9 million), representing an increase of 90.3% over the same period last year.
Interest Revenue: Interest revenue decreased 91.7% to $1.0 million in 2021 from $11.8 million in 2020. The principal balance of the loan portfolio decreased 82.2% to $2.6 million in 2021 from $13.5 million in 2020 consistent with the transition to the marketplace strategy.
Servicing and fee revenue: Servicing and fee revenue increased 89.8% to $10.1 million in 2021 from $5.3 million in 2020. More specifically, servicing and fee revenue growth in 2021 over 2020 is attributable to the following:
Adjusted gross revenue: Adjusted gross revenue decreased to $11.1 million (2020: $17.1 million), representing a decrease of 35.3% for the year ended December 31, 2021 compared to the same period in 2020.
Adjusted Net Revenue: Increased 68.9% to $10.7 million in 2021 compared to $6.3 million in 2020 due mainly to an increase in servicing and fee revenue of 89.8% and to decreases in interest expense of 54.3% to $1.3 million (2020: $2.8 million) and net recovery for loan losses of $0.9 million in 2021 compared to a net provision for loan losses in 2020 of $8.0 million. These decreases are attributable to the transition to a marketplace strategy which led to the discontinued use of financing credit facilities and a reduction of convertible debentures.
Adjusted Operating Expenses: Increased 15.9% to $11.0 million in 2021 compared to $9.5 million in 2020 mainly due to an increase in wages and salaries and data and IT costs as the Company continues to support the future growth in loan originations by investing in innovation and resources as part of its 2021 Post-Pandemic Growth Plan .
Adjusted Net Loss: IOU closed on its year ended December 31, 2021 with an adjusted net loss of $0.3 million compared to adjusted net loss of $3.2 million for the year ended December 31, 2020.
IFRS Net Earnings (Loss): IOU closed on its year ended December 31, 2021 with IFRS net earnings of $3.7 million, or $0.04 per share, compared to IFRS net loss of $(2.8) million or $(0.03) per share for the same period in 2020.
Adjusted and IFRS net earnings (loss)
For the year ended December 31 | 2021 $ | 2020 $ |
Interest revenue | 986,092 | 11,815,590 |
Servicing fees | 6,048,422 | 3,746,601 |
Referral fee revenue | 1,069,145 | 520,432 |
Administrative and other fees | 895,769 | 362,772 |
Accelerated recognition of transaction costs on loans sold | 2,078,030 | 686,937 |
Adjusted Gross Revenue | 11,077,458 | 17,132,332 |
Interest expense | 1,278,677 | 2,800,963 |
Net provision (Recovery of) for loan losses | (925,548) | 7,983,173 |
Cost of Revenue | 353,129 | 10,784,136 |
Adjusted Net Revenue | 10,724,329 | 6,348,196 |
Adjusted operating expense | 11,033,325 | 9,523,257 |
Income tax expense | 17,912 | - |
Adjusted Net Loss | (326,908) | (3,175,061) |
Adjusted Net Loss per Share | (0.00) | (0.03) |
Adjusted Net Loss | (326,908) | (3,175,061) |
Non-cash gain on sales of loans | 7,018,006 | 2,857,268 |
Non-cash amortization of servicing asset | (5,177,397) | (3,004,811) |
Non-cash stock-based compensation | (150,213) | (137,345) |
Non-recurring gain -net | 2,358,580 | 640,474 |
Net Earnings (Loss) per IFRS | 3,722,068 | (2,819,475) |
Net Earnings (Loss) per Share | 0.04 | (0.03) |
IOU's financial statements and management discussion & analysis for the year ended December 31, 2021 have been filed on SEDAR and are available at www.sedar.com.
IOU Financial Inc. is a wholesale lender that provides quick and easy access to growth capital to small businesses through a network of preferred brokers across the US and Canada. Built on its proprietary IOU360 technology platform that connects underwriters, merchants and brokers in real time, IOU Financial has become a trusted alternative to banks by originating in excess of US$1 billion in loans to fund small business growth since 2009. IOU trades on the TSX Venture Exchange under the symbol IOU (TSXV: IOU), and on the US OTC markets as IOUFF. To learn more about IOU Financial's corporate history, financial products, or to join our broker network please visit www.IOUFinancial.com.
Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of IOU including, but not limited to, the impact of general economic conditions, industry conditions, dependence upon regulatory and shareholder approvals, the execution of definitive documentation and the uncertainty of obtaining additional financing. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. IOU does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events, or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Non-IFRS Financial Measures
The Company uses certain non-IFRS financial measures as an alternative method to evaluate performance. These measures include adjusted gross revenue, adjusted net revenue, adjusted operating expenses, non- recurring gains and losses, adjusted net earnings (loss), adjusted net earnings (loss) per share. These financial measures may not be comparable to similar measures used by other issuers. The definitions for certain non-IFRS financial measures are provided below
Definitions
View original content:https://www.prnewswire.com/news-releases/iou-financial-inc-reports-financial-results-for-the-year-ended-december-31-2021-and-breaks-all-time-record-in-annual-loan-originations-301534793.html
SOURCE IOU Financial Inc.
Copyright 2022 Canada NewsWire
1 Year IOU Financial Chart |
1 Month IOU Financial Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions