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Highlights
  • Goeasy’s record expansion of consumer loan portfolio drove a 22.6% revenue increase in 2023.
  • The company’s gross consumer loans receivable surged by 30.4% in 2023, driven by record loan originations.
  • The company targets revenue of CAD 1.45 - CAD 1.55 billion for FY 2024 with improved operating margin.

Goeasy Ltd. (TSX: GSY) offers financial services and leases household items like appliances, furnishings, and electronics to consumers through weekly or monthly lease agreements. Additionally, it provides unsecured instalment loans. The company's main business segments are easyhome and easyfinancial, with easyfinancial generating the most revenue. The company’s goal is to assist individuals who have been refused credit by banks and other conventional financial institutions in obtaining the credit they require.

The company's gross consumer loans receivable rose to CAD 3.65 billion by December 31, 2023, up from CAD 2.79 billion by December 31, 2022, marking an increment of 30.4%. This surge in consumer loans receivable was fuelled by a substantial number of credit applications, resulting in record loan originations across various product and acquisition channels, including point-of-sale lending, unsecured lending, and automotive financing.

In the year ending December 31, 2023, the company achieved record revenue, marking a 22.6% increase compared to 2022. This growth was primarily fuelled by a record expansion of the consumer loan portfolio of the company. Enhanced revenue alongside controlled expenses contributed to the company achieving elevated operating income and net income, both of which grew by 43.4% and 76.9%, respectively.

Further, the company’s free cash flow from operations before net growth in gross consumer loans receivable in FY 2023 increased by 46% versus FY2022. An increase in loan originations, propelled by a record number of credit applications, resulted in increased cash flows.

Recent business update

In the fourth quarter (period ending Dec 31, 2023), the company’s credit and payment performance were stable. In the fourth quarter, the net charge-off rate was 8.8%, down 20 basis points from 9.0% in Q4 2022. It was at the lower end of the company’s forecasted range of 8.5% - 9.5%.

Company outlook

The company is targeting revenue in a range of CAD 1.45 - CAD 1.55 billion for FY 2024. The revenue is expected to be higher than the revenue of FY 2023. Moreover, its operating margin is also expected to improve to 39% for FY 2024.  

Top 10 Shareholders

The top 10 shareholders of GSY together form ~32.10% of the total shareholding. Johnson (Donald K) and Phoenician Capital, LLC hold a maximum stake in the company at ~­­­17.57% and ~2.39%, respectively.

Stock performance

The stock price of GSY has increased by ~6.96% and ~7.28% over the last 1 month and 3 months, respectively. Furthermore, the stock is trading above the average of 52-week high price of CAD 180.10 and 52-week low price of CAD 87.00.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 17, 2024. The reference data in this report has been partly sourced from EODHD/Others.