ThinkSmart launches $9m capital raising

Perth-based point of sale financing provider ThinkSmart has announced a profit of $6.8 million for the year ended December 31, while also launching a $9 million capital raising.

ThinkSmart reported revenue of $45.5 million for the year, up 9 per cent on the previous 12 months.

Pre-tax profit at the company’s UK division increased 61 per cent to $7 million, the company said, while the Australian division’s profits dropped 9 per cent to 8.7 million.

The Australian division’s revenue, however, was up 8 per cent to $29.5 million, despite difficult trading conditions in electrical retailing.

Chief executive Ned Montarello said the overall performance was particularly pleasing.

“Post-GFC, ThinkSmart has significantly re-aligned its business model to adapt to the changing retail and funding environment and that transformation is now complete,” Mr Montarello said.

“ThinkSmart has in place today an exceptional management team, substantial funding facilities and a scalable operating platform, positioning the business to materially increase earnings over the medium term.

“To ensure ThinkSmart has the resources to maximise our potential growth, a final dividend will not be paid for the 2011 financial year, however we expect to pay a final dividend for the 2012 financial year.”

Also today, ThinkSmart launched a fully underwritten, non-renounceable entitlement offer to raise around $9 million.

The offer, which is underwritten by JP Morgan Australia, will be priced at 35 cents per share.

The proceeds of the entitlement offer will be put towards the launch of Fido, a consumer payment plan product for the Australian market, and ThinkSmart Business Leasing.

“The decision to undertake this equity raising highlights management’s confidence in the success of our new product initiatives and the transformation we have undertaken,” Mr Montarello said.

“By equity funding these new growth opportunities, ThinkSmart retains its conservative approach to funding future growth through cash rather than debt, reducing the risks to the business and allowing the company to smoothly transition across into its new funding facilities and leverage its superior operating platform.”

ThinkSmart stocks last traded at 46.5 cents.