Vancouver, British Columbia–(Newsfile Corp. – January 29, 2024)- Solution Financial Co., Ltd. (TSX: SFI) (“''company”), The company, Canada's leading provider of luxury and ultra-luxury asset leasing, today announced its financial results for the year ended October 31, 2023.
Earnings highlights for the year ended October 31, 2023:
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Net income for the year decreased to $38,672 compared to $837,554 in 2022.
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Adjusted net income(1) compared to $1,613,436 in 2022, which decreased to $451,826.
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Revenue decreased from $20,347,916 in 2022 to $15,377,450.
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The total lease portfolio at year-end decreased 2.4% to $25,578,287.
Year-end operational highlights:
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Leveraging our new securitization financing facility, we further strengthened our working capital base, secured more favorable fixed interest rates, and positioned our company for market expansion opportunities.
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Completed several enhancements to the company's lease quote management system to streamline quote generation across its dealer network.
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Launch of our first Lease Club annual leasing and business planning program.
Despite the turmoil in the lending sector in 2023, which was largely spurred by the Bank of Canada's efforts to combat inflation by raising prime lending rates, Solutions Financial successfully navigated these challenges. “We not only maintained profitability in 2023, but also avoided credit losses while strengthening our balance sheet and securing debt facilities to support our 2024 growth targets. “This is a remarkable achievement against the backdrop of greater leverage that other auto lenders are also facing,” said Brian Pang, CEO of Solutions Financial.
“While rising prime loan rates have certainly had an impact on our financial results, our historic profits have facilitated favorable tax savings and cushioned the impact. , Solution Financial outperformed many of our competitors. We attribute this success to our strong operating results.'' Our historically conservative credit policy and financial management have contributed to this outcome, but at the same time, we are exposed to rapidly evolving market opportunities for our company. It also offers tremendous opportunities to fill in the gaps. Other traditional auto lenders, which are under pressure to significantly raise interest rates to compensate for the industry's rise in credit defaults, are also under pressure to increase interest rates, given the likely decline in the number of international students coming to Canada. We believe the timing is right to expand the opportunity. These are people who don't have the financial means to support themselves completely during their stay in Canada, which is not common among our historical clients.
As we look to 2024, we remain focused on educating the Canadian automotive market about our unique approach to leasing and expanding our network of supported dealers in Alberta and Ontario. Our hybrid leasing approach has been a key driver in the revitalization of Western Canada's luxury and ultra-luxury vehicle markets over the past several decades, and we are looking for a more flexible and proactive financing partner across Canada. Very suitable for more consumers. We help them finance their luxury assets. We are committed to continuing this trajectory and ensuring market vitality for years to come. ”
Financial summary
Solutions reported net income of $38,672, or $0.0004 per share, for the year ended October 31, 2023. This compares to net income of $837,544, or $0.009 per share, for the year ended October 31, 2022.
Adjusted net income, which more closely reflects actual cash receipts, was $451,826 for the year ended October 31, 2023.(1) $0.005 per share, compared to $1,613,436 or $0.018 per share for the year ended October 31, 2022. Adjusted net income excludes non-cash accretive charges of $185,062 related to convertible debt and right-of-use assets, income tax recoveries of $408,000, and amortization expense. $85,681, allowance for credit losses of $89,114, and non-recurring listing and financing fees of $461,297.
lease portfolio
As of October 31, 2023, Solutions' lease portfolio had 306 vehicles, a net decrease of three vehicles during the year, resulting in a total lease portfolio of $25.6 million.
As of October 31, 2023, the average remaining lease term of the portfolio, weighted by the net book value of each vehicle, was 1.7 years. As of October 31, 2023, Solutions' 306 leases generated annual gross rental and lease cash flows of approximately $7 million.
About the solution
Solution Financial began operations in 2004 and specializes in sourcing and leasing luxury and exotic cars, yachts and other high-value assets. The solution works with a select group of luxury auto and marine dealers to provide financing solutions to customers who prefer more flexible leasing options than those traditionally offered by banks and other leasing providers. Typical customers include new immigrants, business owners, and international students who tend to upgrade their vehicles more frequently than with traditional lease agreements. Solution Financial offers a unique leasing experience that partners with clients to help source limited edition and hard-to-find vehicles, as well as providing white glove services for vehicle insurance, maintenance, upgrades and resale. Masu.
Note 1 – Non-IFRS financial measures
The solution provides all financial information in accordance with International Financial Reporting Standards (“IFRS”). To supplement our consolidated financial statements presented in accordance with IFRS, we also provide in this press release certain non-IFRS financial measures, including adjusted net income. In calculating these non-IFRS financial measures, we have excluded certain transactions that are not necessarily indicative of our ongoing operations or do not affect our cash flows. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other issuers. These measures should not be considered in isolation or as a substitute for analysis of the Company's financial information reported under IFRS.
Cautionary note regarding forward-looking statements
This press release contains “forward-looking information” as defined in applicable Canadian securities laws. This information includes statements regarding our goals, our strategy to achieve those goals, and statements regarding management's beliefs, plans, estimates, projections, and intentions, as well as similar statements regarding anticipated future events or results. This includes, but is not limited to, descriptions. , circumstances, achievements, or expectations that are not historical facts. Forward-looking information generally includes statements such as “outlook,” “target,” “may,” “will,” “anticipate,” “intend,” “estimate,” “anticipate,” or “believe.” “is,” “should,” “plans,” “continues,” or similar expressions suggesting future results or events. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. Although the forward-looking information contained in this press release is based on what management believes to be reasonable assumptions, there can be no assurance that actual results will correspond to this forward-looking information. Certain statements contained in this press release may be considered “financial outlooks” for the purposes of applicable Canadian securities laws, and therefore financial outlooks may not be appropriate for purposes other than this press release. .
The forward-looking information contained in this press release is made as of the date of this press release and should not be relied upon as representing Solution's views as of any date subsequent to the date of this press release. Except as required by applicable law, management and Solutions' board of directors do not publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise. We are not obligated to do so.
For more information, contact Sean Hodgins at (778) 318-1514.
on behalf of the board of directors
(Signed)brian pan”
brian pan
Representative Director, President, CEO and Director
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