Investment case

Having secured a top three position in home credit, the market leading network in unsecured branch-based lending and a scaleable platform in guaranteed loans, the Group is extremely well placed to achieve its targeted growth rate of 20% loan book growth and a 20% return on assets.

There is a significant opportunity to deliver substantial value for the Group’s shareholders, one that has been created by the confluence of a number of factors: (i) certain competitors’ decision to withdraw from some of these segments (ii) a favourable macroeconomic backdrop for elements of our core customer base; (iii) the fact that NSF is well-capitalised and has access to significant debt funding; and (iv) because NSF has assembled a highly experienced management team, one that is focused on executing a clear, ambitious but eminently achievable plan.

The specific steps taken by NSF include:

  • applying the Board’s longstanding experience and knowledge in originating, growing and maintaining profitable non-standard consumer finance businesses;
  • building a strong, highly professional management team;
  • deploying the Board’s substantial regulatory expertise, having operated regulated businesses in non-standard consumer finance markets for over 20 years, working with trusted, conduct-focused management teams; and
  • providing a solid platform to finance both organic and non-organic growth through a diligent process of capital deployment and management control.

Our approach to acquisitions

In evaluating acquisition opportunities, the Directors seek businesses that will enable the Group to:

  • grow lending balances by at least 20% per annum on average;
  • achieve strong yields underpinned by APRs of at least 50% to 100% in unsecured lending;
  • carefully manage impairment levels implying an attractive ratio of risk to APR;
  • maintain a cost to income ratio of approximately 50% or lower once the business reaches appropriate scale;
  • ensure good customer outcomes and the fair treatment of customers;
  • implement an efficient funding and capital structure; and
  • generate strong cash flow, funding the payment of regular and growing dividends over time.

In assessing the merits of any potential acquisitions, the above factors and other considerations relevant to NSF’s business objectives will be considered by the Directors.

Managing growth

Through a series of carefully structured management processes and controls we ensure all our businesses have access to appropriate funding; implement strong management controls; employ rigorous credit standards; offer attractive and competitive product pricing; effectively roll-out and implement new compliance protocols; and improve IT systems. The Directors believe that such changes will deliver much improved customer outcomes and create shareholder value.