Annual General Meeting Agenda FY 2016 AGM Meeting Open Greg Pynt, - - PowerPoint PPT Presentation
2016 Annual General Meeting Agenda FY 2016 AGM Meeting Open Greg Pynt, Chairman Group Operating Results Business & Financial Review Peter Andronicos, CEO Operations and Strategy Highlights Q1 2017 APRIL 2015 Summary & Outlook
APRIL 2015
Meeting Open Greg Pynt, Chairman Business & Financial Review Peter Andronicos, CEO Operations and Strategy Highlights Q1 2017 Summary & Outlook Formal Business Greg Pynt, Chairman
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FY 2016 AGM
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FY 2016
– Additional “Home grown” brokers via the eChoice Academy – Substantial increase in our broker network
– Fairfax (Domain) and new digital partnerships driving increased digital revenue – Platform enhancements to maintain our position as an industry leader
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FY 2016
– Operating costs further reduced driven by realignment of operations – Corporate debt down – repayments ahead of target
– Exited securitisation business (Firstfolio Capital) – ASX delisting completed in August 2016
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$42.2m
Digital Revenues
Revenue Cash Op EBITDA
$7.1m
Operating Expenses
$3.2m
Settlements
$3.1b
Cash Gross Margin
$20.8m
FY 2016
a $16.4m loss in the prior year
sourced revenues
FY 2016
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supports financial position
October 2015
used to reduced debt
($m) 30 Jun 16 30 Jun 15 Assets Cash 3.4 7.3 Receivables 2.3 2.6 Loans and advances to customers
NPV of trail commission income 109.8 129.4 Property, plant and equipment 0.8 0.5 Intangibles 19.9 20.0 Total assets 136.3 290.2 Liabilities Payables 3.9 3.6 Warehouse and other funding 0.0 127.0 NPV of trail commission expense 71.9 80.6 Borrowings 46.4 58.3 Provisions 0.6 0.7 Deferred tax 6.4 4.9 Total liabilities 129.0 275.1 Net Assets 7.2 15.0
higher driven by Domain and other alliances
– Lead qualification to more than 57,000 customers – Delivered in excess of 6,000 quality leads – Serviced over 20,000 enquiries equating to $9 billion of opportunities
259,200 people interacting with our tools, extending our digital footprint
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FY 2016
Core business generators
Technology development team Leading edge CRM system Customised lead generation program In-house Concierge support and customer call centre
firsthomebuyers.com.au
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FY 2016
“For somebody who looks at refinancing.com.au, yes there are 25 plus lenders, but it actually cross references the consumer against thousands of loan variations based on their specific needs”
grew by 20%
billion
– Aggregation & Direct settlements up 5.6%
added during FY16 and expected to significantly improve Direct channel settlements
– Direct settlements up 18.6% in Q4 FY16
contribute to future growth with early successes
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FY 2016
Core business generators
Finance and lifestyle product and service bundling Broker training Academy In-house Concierge support and customer call centre
Industry alliances provide commercial diversification opportunities and service that exceeds customer expectations
FY 2016
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FY 2016
Loan Book ($b)
strategic change
2,115 11,919 2,335 Wholesale Aggregation Direct 0% 5% 10% 15% 20% 25% 30% Wholesale Aggregation Direct
Run off of loan book (%)
Sep-16 Sep-15
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Q1 2017
the Australian market
same time last year
growth in the last 12 months in Australian refinancing market
1. Source: ABS Table 11 Housing Finance Commitments, Sep 2016 2. Source: ABS Table 13b Housing Finance Commitments, Sep 2016
Direct Settlements Digital Revenues Broker numbers
the market with further portal launches planned
diversify their income by enabling them to target specific market segments with quality product
infrastructures, the new work flow enhancements have been launched in November 2016, enabling brokers to be more efficient
complete solutions for both consumers and industry participants
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FY 2016 AGM
Broker invest Consumer solutions Partner connect
APRIL 2015
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Agenda
To consider and, if thought fit, pass the following resolution as an ordinary resolution: That, for the purposes of Rule 13.2 of the Company’s Constitution and of the Corporations Act, Mr Dustine Pang, a Director appointed by the Board since the last annual general meeting of Shareholders and retiring in accordance with the Company’s Constitution, being eligible and having offered himself for election be elected as a Director of the Company.’
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Election of Mr Dustine Pang
Proxies received
FOR AGAINST OPEN ABSTAIN
Shares
205,218,499 686,760 24,308,696 903,220
%
89.14 0.30 10.56
To consider and, if thought fit, pass the following resolution as an ordinary resolution: ‘That Mr David Walker, a Director retiring by rotation in accordance with Rule 16.1 of the Company’s Constitution and being eligible and having offered himself for re-election be re- elected as a Director of the Company.’
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Re-Election of Mr David Walker
Proxies received
FOR AGAINST OPEN ABSTAIN
Shares
204,324,898 1,470,277 24,414,828 907,172
%
88.75 0.64 10.61
To consider and, if thought fit, pass the following resolution as an ordinary resolution: ‘That Mr Greg Pynt, a Director retiring by rotation in accordance with Rule 16.1 of the Company’s Constitution and being eligible and having offered himself for re-election be re- elected as a Director of the Company.’
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Re-Election of Mr Greg Pynt
Proxies received
FOR AGAINST OPEN ABSTAIN
Shares
204,431,030 1,490,277 24,288,696 907,172
%
88.80 0.65 10.55
To consider and, if thought fit, pass the following resolution as an ordinary resolution: ‘That for the purposes of section 254H of the Corporations Act and for all other purposes, approval be given to consolidate the issued capital of the Company on the basis that ten (10) shares in the Company be consolidated into one (1) share, and where this consolidation results in a fraction of a share being held by a shareholder, the fraction will be rounded to the nearest whole share (with exact half shares being rounded up). The consolidation will take effect from the date that Resolution 4 is passed.
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Consolidation of shares
Proxies received
FOR AGAINST OPEN ABSTAIN
Shares
202,329,494 4,475,820 24,288,696 23,165
%
87.55 1.94 10.51
APRIL 2015
This document has been prepared by eChoice Limited (“eChoice”) and comprises written materials/slides concerning eChoice. The material in this presentation is general background information about eChoice and is current at the date of the presentation. It is information given in summary form and does not purport to be complete. All statements are based on the Company’s best information as at the date of the presentation and eChoice has not independently verified the information contained herein. This presentation is for information purposes only and does not constitute or form part of any offer or invitation to acquire, sell or otherwise dispose of, or issue, or any solicitation of any offer to sell or otherwise dispose of, purchase or subscribe for, any securities, nor does it constitute investment, legal, tax or accounting advice or recommendations, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. Potential investors should not rely solely on the information contained herein prior to making any investment decision. Investors should seek independent advice from a properly qualified advisor, giving regard to their own personal circumstances, prior to forming any investment decision. This document contains certain statements (including indications of and guidance on future earnings and performance, projections, estimates and opinions which can be identified by the fact that they use words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “budget”, “believe”, “target”, “may”, “assume” and words of similar import) concerning the anticipated future performance of eChoice ("Forward Looking Statements"). These Forward Looking Statements may involve significant elements of subjective judgment and assumption as to future events which may or may not be correct. None of these Forward Looking Statements is a guarantee or representation as to future performance or any other further matters, which will be influenced by a number of factors and subject to various uncertainties and contingencies, many of which will be outside the control of eChoice. Accordingly, eChoice’s actual results, performance and prospects could differ materially from that expressed in or implied by the Forward Looking
are accurate, complete, reliable or adequate that they will be achieved or prove to be correct. Except for any statutory liability which cannot be excluded, each of eChoice, its respective officers, employees and advisers expressly disclaims any responsibility for the accuracy or completeness of the Forward Looking Statements and excludes all liability whatsoever (including in negligence) for any direct or indirect loss or damage which may be suffered by any person as a consequence of any information in this release or any error or omission therefrom. All references to dollars, cents or $ in this presentation are to Australian currency unless otherwise stated.
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ECHOICE LIMITED (ACN 002 612 991) CHAIRMAN’S NOTES ANNUAL GENERAL MEETING – 24 NOVEMBER 2016 AT 2.00 PM AT Level 4, 60 CARRINGTON STREET, SYDNEY NEW SOUTH WALES
Opening – 2.00 PM
Ladies and Gentlemen, Good afternoon and welcome to the eChoice Limited 2016 annual general meeting. The secretary has informed me that we a have a quorum and I declare the meeting open
Special Welcome
My name is Greg Pynt and I am Chairman of eChoice. To those of you that I have not met, I hope we can meet over refreshments following the meeting. May I remind guests that this is a meeting of shareholders. It is shareholders only that will be called on to vote on the resolutions put forward and to put questions. I would like to take this opportunity to introduce to you the members of the Board and Senior Management:
Peter Andronicos – Managing Director and CEO
Dustine Pang – Finance Director and Company Secretary
Tim Burton-Taylor – Non-Executive Director
David Walker – Non-Executive Director (via telephone) I would also like to introduce to you to Delarey Nell of the Company’s auditors, Deloitte Touche Tomahtsu.
Apologies
We would like to apologise on behalf of Tony Wales who unfortunately could not make it here today, we have received no other apologies from any other shareholders. The proceedings today will be as follows. I will make a brief introductory address after which our Managing Director, Peter Andronicos, will provide his report on the operations of eChoice during the 2016 financial year and our immediate outlook. We will then move to the matters for decision by shareholders as set out in the Notice
And at the conclusion of the meeting, the Board and Management invite you to join us for light refreshments.
Notice of Meeting
As the Notice of this Annual General Meeting and the Explanatory Notes have been circulated in accordance with the requirements set out in the Company’s Constitution and the Corporations Act 2001 (Cth) and additional copies have been made available today, I regard the Notice of AGM and Explanatory Notes as having been read.
Declaration of Proxies
The Company Secretary has advised that valid proxies have been received from 101 shareholders, representing 230,213,955 shares or 30.33% of the issued capital of the Company. As Chairman of the meeting I am holding useable open proxies which I intend to vote in favour of the resolutions to be put.
CHAIRMAN’S ADDRESS AT ANNUAL GENERAL MEETING Before attending to the formal business of the meeting, I would like to provide a brief
In my address at last year’s AGM I announced that we had embraced a new strategy concentrating on digital platforms in order to take advantage of the increasing demand for on line solutions. I am pleased to announce today that eChoice has made solid progress in prosecuting its new growth strategy. We have consolidated our position as an industry innovator in digital solutions and the distribution of mortgages and other financial services. We also continued to deliver our market-leading technology, tools and programs in order to expand our broker network and consolidate our business
The five strategic pillars of People, Partners, Process, Product and Profit remain key supports for our strategy. Regarding our People, I am pleased to report good progress in the development of “home grown” brokers via the eChoice Broker Academy. After a more difficult first half, initiatives to grow the direct business lifted settlements by 18.6% in the final quarter, which is an excellent outcome. Our Partnerships were also a source of strength. Digital sourced revenue increased significantly, supported by our partnership with Fairfax’s Domain and other key alliances. To maximise the growth potential of eChoice your Board took the view, strongly supported by shareholders, that the benefits of our ASX listing were outweighed by the listing’s ongoing costs and the limitations it placed on the company’s ability to grow and restructure. Delisting was completed in mid-August 2016. Notwithstanding this decision, we remain committed to continuing to provide shareholders with appropriate disclosures regarding our operational and financial performance. The financial results for the year continued primarily to reflect the run off of our loan
there are encouraging signs of growth emerging from our new strategy, with digital sourced revenue growing 65%. Reducing costs to reflect our new business structure is a key part of our strategy, and
we have achieved a $3.2 million reduction in annual operating costs through prudent business rationalisation. eChoice exited the mortgage securitisation business as planned in the first half of the financial year, releasing $7.8 million in capital. As a result we were able to reduce debt by $11.9 million during the year, well ahead of our previously announced target
Not only are our new businesses growing, our costs are much lower and our balance sheet is healthier. Corporate debt at 30 June 2016 was significantly lower at $46.4 million, compared to $58.3 million in the prior year. Your board is confident that eChoice has a strong and secure future. We look forward to working hard for those shareholders who continue with us on the journey ahead. Finally, I would like to acknowledge the company’s senior management, our valued staff and partners for their commitment and teamwork in repositioning the eChoice business in line with our new strategy. CEO’S ADDRESS AT ANNUAL GENERAL MEETING The past year for eChoice has focused on strengthening the depth and scalability of
the considerable mass-market servicing opportunities across the financial sector and
I’m pleased to report our financial position improved significantly during the year. eChoice’s statutory net loss after tax of $9.3 million was a big improvement on the previous year’s loss of $18.5 million. Excluding the NPV impairment, our cash net loss was $1.9 million, compared with a $16.4 million loss in the prior year, so things are very much headed in the right direction. Our cash gross margin and cash operating EBITDA remained strongly positive, generated mostly from our $16.4 billion loan book. We achieved growth of over 3% in mortgage settlements of $3.1 billion and our new digital businesses grew revenue by 65%. A reduction in operating costs of $3.2 million was achieved through rationalisation of the business in line with the new strategy and the office move from the CBD to Ultimo.
The improved balance sheet is a real feature of the 2016 results with an $11.9 million reduction in debt. This came about through the strong operating cash flow I mentioned and the sale of the Firstfolio Capital business earlier in the financial year, which released $7.8 million. The NPV asset declined $10.8 million, which essentially reflects the run off of the $16.4 billion loan book. While it does not affect our cash earnings, we expect the impact on accounting profit to continue. The aim at eChoice is to lead the way into a new era of digital servicing. The eChoice proposition is not just to focus on what is needed today, but develop what is needed for tomorrow. eChoice provided online services to more than 57,000 consumers in the past year through its direct channel and partner programs, extending our overall market reach. eChoice’s call centre delivered 6,000 quality leads over the last year to a mortgage broker or financial institutions, supporting a substantial expansion of our team. Lead generation programs facilitated 20,000 enquiries, which represents more than $9 billion in lending opportunities. These leads, nurtured and managed through our Concierge program, have contributed to a 65% increase in income in the last financial year, with further benefits to be realised over the coming year. Industry-leading initiatives such as the Concierge program have contributed to increasing demand by institutions for our in-house mortgage broking fulfilment services and new pilot programs are set to roll out over the next year. Ongoing enhancements to FLeaTS, our proprietary lead management platform, augmented by a number of critical personnel appointments that strengthen the capacity of our network. However, our core priority remains to build further capacity with our existing technology infrastructure. During Q1FY17 eChoice also launched its own purpose-built portal, www.refinancing.com.au, which offers consumers a web-based mortgage refinancing service with the option of freely utilising the expertise of one of its qualified loan consultants.
The launch of this portal positions the company well to capitalise on the high growth Australian refinancing market, which recorded 22% growth in settlements in the last 12 months. Following this launch, the company is continuing to develop additional digital assets that will appeal to specific consumer segments, and for eChoice to offer additional commercial gateways for the finance industry. The immediate priority is to build further capacity with existing technology infrastructures, with new broker workflow enhancements which have been launched in November 2017. Our aggregation platform is already providing eChoice brokers with a competitive edge in the market - and above all, delivering tangible results for the business. Our broker numbers grew 20% to 324 and this supported growth in settlement volumes of 3.3% to $3.1 billion during the financial year. After a more difficult first half, initiatives to grow the direct business lifted settlements by 18.6% in the final quarter, which is an excellent outcome. Six new quality product offerings in our growing mortgage aggregation channel continued to grow this business. Our $16.4 billion loan book delivers a reliable stream of cash flow that supports debt reduction and growth initiatives. Aggregation and direct loans represent 87% of loan book and 98% of settlements. Loan book composition reflects the change in origination mix in line with the strategic repositioning with settlement mix trending away from higher margin wholesale settlements. The run-off in the loan book is expected to continue in line with our strategy with cash flow realized, utilised to repay debt and fund growth initiatives. The results from the first three months of FY2017 show improvement in the quality and volume of enquiries and is delivering growth in settlement volumes and revenues ahead of market growth rates. This reflects the effectiveness of our growth strategy and recent business initiatives.
We are particularly encouraged by improvements in the quality and quantum of new
approximately 40 per cent compared to the same quarter last year and our average loan size is growing at above market rates. Driving this growth is the significant increase in the size and quality of our broker
year and hired additional internal home loan managers. We launched a new portal, refinancing.com.au to take advantage of strong growth in this segment of the market. There is substantial scope over the full year for the company to more broadly expand its services across a range of industries. As a consequence of our prudent financial management over the last year, we have capacity to re-invest funds back into the business over the coming year. The first quarter results provide an encouraging start to the new financial year, and positively reflect the strategy to consolidate our position as an industry innovator in digital solutions and the distribution of mortgages and other financial services. We are well-positioned for the year ahead with the ongoing development of our digital
With these results and with key digital projects now moving through our development pipeline, we are confident our market-leading fintech capabilities and expansion of our consumer reach will deliver excellent returns for our shareholders, broker network and mortgage customers. We are moving boldly forward as leaders in the fintech arena with the launch of our first key program under the brand of www.refinancing.com.au, which blends the best
deliver a complete solution for the consumer and industry. As we reflect positively on the milestones reached throughout FY2016, we remain excited about the future and the broad range of opportunities for the eChoice brand, its growing business divisions and its valued partners. Thank you for your time and interest in eChoice.