Thursday, 6 May 2010

Carfinco Delivers Turbo Charged Q1 Earnings

Carfinco Income Fund (TSX: CFN.UN)
Units issued: 23.9 million
Units fully diluted: 24 million
Current monthly distribution: $0.02
Q1/2010 special distribution: $0.04


Carfinco Income Fund is firing on all 12 cylinders as is evident with today’s news that first quarter earnings set another record.

The speciality auto finance fund posted earnings of $3.6 million, which is far above the previous record of $2.6 million set in the last quarter of 2009. At $0.15 earnings per unit in Q1, Carfinco is now on an annualized rate of $0.60 earnings per unit. The May 5th closing price of the units was $3.94.

The record breaking trend has continued over the last four quarters.

Highlights of today’s news include:

• Net Earnings for the quarter were $3.6 million, up 365.1% from the $0.8 million for the first quarter of 2009.
• Total distributions to Unit-holders for the quarter were 9.5 cents per unit, a payout of 57.9% of the 15 cents earnings per unit.
• Loan originations were $21.5 million, a 40.0% increase from the first quarter of 2009.
• Finance receivables increased by 4.1% or 16.4% annualized, to $117.8 million from the end of 2009.
• Debt to Equity ratio was 2.69:1 (well under the bank covenant maximum of 3.75:1).
• Delinquent accounts in excess of 31 days improved dramatically by almost 43% to 4.2% from 7.0% at the end of the first quarter of 2009.

It is worth noting that distributable cash for Q1 amounted to just over $3.2 million or $0.135 per unit but the fund has distributed 70% of that amount being $0.095 per unit. As such, the fund has considerable latitude going forward.