2023
Appendix 4E &
Annual Report
Cash Converters International Limited
ABN 39 069 141 546
Annual Report – 30 June 2023
Table of Contents
Appendix 4E – Results for announcement to the market ...................................................................................... 2
Corporate directory ................................................................................................................................................ 4
Letters to Shareholders .......................................................................................................................................... 5
Operating and financial review............................................................................................................................... 7
Directors’ report ................................................................................................................................................... 17
Remuneration report (Audited) ............................................................................................................................ 25
Auditor’s independence declaration .................................................................................................................... 47
Corporate governance statement ........................................................................................................................ 48
Financial statements ............................................................................................................................................. 49
Independent auditor’s report to the members .................................................................................................. 130
Shareholder information .................................................................................................................................... 135
30 June 2023
Cash Converters International Limited
1
Appendix 4E
Cash Converters International Limited
ABN 39 069 141 546
Appendix 4E
Preliminary Financial Report for the year ended 30 June 2023
(previous corresponding period 30 June 2022)
Appendix 4E – Results for announcement to the market
30-Jun
2023
$'000
30-Jun
2022
$'000
Change
$'000
%
Revenue from ordinary activities
302,697
245,937
56,760
23%
(Loss) / profit from ordinary activities after tax attributable to
members
Significant items 1
Significant items 2
Significant items 3
Significant items 4
Operating profit from ordinary activities after tax
(97,155)
11,177
(108,332)
nm
4,670
7,837
(3,167)
-40%
110,481
(644)
2,752
-
-
-
20,104
19,014
110,481
(644)
2,752
1,090
nm
nm
nm
6%
Net (loss) / profit for the period attributable to members
Basic (losses) / earnings per fully paid ordinary share
Net tangible asset backing per ordinary share 5
(97,155)
(15.54)
29.11
11,177
1.80
29.94
(108,332)
nm
cents per share
cents per share
1
2
3
4
The operating profit for FY2023 is presented excluding the non-cash impairment expense of $6.672 million ($4.670 million after
tax effect) and the operating profit for FY2022 is presented excluding the non-cash impairment expense of $11.196 million
($7.837 million after tax effect) on the carrying value excluding goodwill of the assets of individual corporate stores where
forecast cash flows have been negatively impacted. FY2022 forecast cash flows were largely impacted due to factors directly
associated with the impact of COVID-19 closures and uncertainty in the trading conditions beyond June 2022. FY2023 forecast
cash flows have been impacted due to Protected Earnings Amount (“PEA”) legislation changes that came into effect on 12 June
2023 which will negatively impact the future lending volumes and revenue generation of the Store Operations segment.
The operating profit for FY2023 is presented excluding the non-cash goodwill impairment expense of $110.481 million on the
carrying value including goodwill of the assets of the group cash generating units (“CGUs”) where forecast cash flows have been
negatively impacted due to PEA legislation changes that came into effect on 12 June 2023 which will negatively impact the future
lending volumes of both the Personal Finance and Store Operations segments.
The operating profit for FY2023 is presented excluding a non-recurring indirect tax recovery, net of consulting fees, of $0.920
million ($0.644 million after tax effect) relating to indirect tax recovery on the class action settlement recorded within the FY2019
results.
The operating profit for FY2023 is presented excluding various non-recurring professional and administrative costs of $3.590
million ($2.752 million after tax effect) directly attributable to ongoing merger and acquisition (“M&A”) due diligence being
conducted by the business relating to FY2023 acquisitions and potential future acquisitions that have not yet been finalised.
The calculation of net tangible assets per ordinary share includes right-of-use assets and lease liabilities.
5
nm Not meaningful.
The operating result is presented to aid the comparability and usefulness of the financial information reflecting the underlying
performance of the business. This information should be considered in addition to, but not instead of or superior to, the Group’s
financial statements prepared in accordance with IFRS. The operating results presented may be determined or calculated
differently by other companies, limiting the usefulness of those measures for external comparative purposes.
30 June 2023
Cash Converters International Limited
2
Appendix 4E
This report should be read in conjunction with any announcements made in the period by the Company in
accordance with the continuous disclosure requirements of the Corporations Act 2001 and the ASX Listing Rules.
Additional Appendix 4E disclosure requirements can be found in the directors’ report and the 30 June 2023
financial statements and accompanying notes.
Dividends per ordinary share / distributions
Amount per
security
(cents)
Franked
amount per
security
Record date
Paid / payable
date
1.00
1.00
100%
23-Sep-22
14-Oct-22
100%
24-Mar-23
14-Apr-23
2022 final dividend
2023 interim dividend
Dividends
The directors of the Company have declared a final dividend of 1.00 cent per share with the release of the final
year end results and reporting date of 30 August 2023. The dividend will be 100% franked and will be paid on 13
October 2023 to those shareholders on the register at the close of business on 15 September 2023.
With the declaration of this dividend, the Company’s Dividend Reinvestment Plan (“DRP”) remains suspended.
There is no provision for a final dividend in respect of the year ended 30 June 2023. Provisions for dividends to
be paid by the Company are recognised in the Consolidated Statement of Financial Position as a liability and a
reduction in retained earnings once the dividend has been declared.
Financial statements
Released with this Appendix 4E report are the following statements:
• Consolidated statement of profit or loss and other comprehensive income together with the notes to the
Statement
• Consolidated statement of financial position together with the notes to the Statement
• Consolidated statement of changes in equity together with the notes to the Statement
• Consolidated statement of cash flows together with the notes to the Statement
This report is based on consolidated financial statements which have been audited.
Details over entities over which control has been gained or lost
During the period the Group acquired the remaining 75% of Cash Converters New Zealand, including 11
Corporate stores and the rights to various franchise fees from a further 11 Franchise stores. This business
combination is structured in such a way that the acquired business becomes a subsidiary of Cash Converters
International Limited (“CCIL”).
Details of associates and joint venture entities
Prior to 30 November 2022 the Group held a 25% equity interest in Cash Converters New Zealand, which
generates income from corporate stores, franchise contracts, financial services and software. The Group’s share
of the profit prior to 30 November 2022 of $0.251 million (2022: $0.853 million) is reflected in the financial result
for the period as a share of net profit of equity accounted investments. On 30 November 2022, the Group
acquired the remaining 75% interest (refer to note 14) from which point they are now recognised as a 100%
owned subsidiary.
30 June 2023
Cash Converters International Limited
3
Corporate directory
Corporate directory
Directors
Mr Timothy Jugmans
Mr Sam Budiselik
Mr Peter Cumins
Mr Lachlan Given
Ms Julie Elliott
Mr Robert Hines
Mr Henry Shiner
Ms Susan Thomas
Company Secretaries
Ms Kelly Moore
Ms Meagan Hamblin
Non-Executive Chairman
Managing Director
Executive Deputy Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Registered and principal office
Level 11, 141 St Georges Terrace
Perth WA 6000
Australia
Tel:
+61 (8) 9221 9111
Web: www.cashconverters.com
Share registrar
Computershare Investor Services Pty Ltd
Level 11
172 St Georges Terrace
Perth WA 6000
Australia
Tel:
1300 850 505
Auditors
Deloitte Touche Tohmatsu
Brookfield Place, Tower 2
123 St Georges Terrace
Perth WA 6000
Australia
Stock Exchange
Australian Securities Exchange
Level 40, Central Park
152-158 St Georges Terrace
Perth WA 6000
Australia
ASX code:
CCV
30 June 2023
Cash Converters International Limited
4
Letters to Shareholders
Letters to Shareholders
Chairman’s Shareholder Letter
Throughout the year, the Cash Converters Board of Directors and management team have worked hard to
ensure our business remains well positioned to drive enhanced long-term value for all of our stakeholders. It is
pleasing to report another year of strong financial and operating performance, in a period that has not been
without its challenges, particularly with respect to regulatory change relating to our Small Amount Credit
Contract (“SACC”) business. I want to personally thank all of our Cash Converters team members throughout the
14 countries in which we operate, for their considerable efforts to deliver these results.
Demand for our products is at an all-time high. Loan books are growing rapidly and our focus on a culture of
robust risk and compliance has developed into a central strategic pillar of all that we do. The Company
experienced record applications across FY2023, resulting in the combined gross loan book growing 27% to a new
record level of $271.355 million as at 30 June 2023. In addition, we are launching exciting new loan products
and continue to have a strong pipeline of franchise store acquisitions across the markets in which we operate.
On the regulatory front, legislative change passed by the Australian Government during the financial year as a
part of a Financial Sector Reform Act, has considerably impacted our SACC business. As a result, the Board has
endorsed management’s strategy to exit this market over time. Whilst uncertainty exists as to customer
behaviour resulting from these changes, our customers’ need for cash does not change. If anything, the need is
growing, as Australians struggle to manage household budgets as cost-of-living increases continue to impact
consumers across the globe.
Whilst the exit from the SACC loan sector won’t be without its challenges, as reflected by the impairment in the
first half of the financial year of goodwill based on the anticipated impact to earnings from this decision, the
Board remains confident that earnings can recover over time, as highly scalable new product loan books grow
rapidly, and earnings accretive franchise store acquisitions continue.
Considerable progress was made this year in consolidating and growing our store footprint, both domestically
and overseas. Internationally, we were very pleased to announce an agreement to acquire the Cash Converters
New Zealand Master Franchisor, in addition to the largest franchise store network in the United Kingdom (Capital
Cash Ltd).
Finally, as a result of the confidence the Board has in our balance sheet strength and earnings run-way, it is my
pleasure to confirm the payment of a final 1c fully franked dividend to our shareholders for 30 June 2023. This
is the sixth straight half yearly interval dividend payment of this amount.
I would like to thank my fellow Board members for their contribution, as well as management and their teams
for working tirelessly on executing the Company’s strategy as well as serving our customers with passion, dignity
and respect. I would also like to acknowledge and thank our shareholders for their continued support and look
forward to working together on what is a very exciting future for the Cash Converters business.
Timothy Jugmans
Non-executive Chairman
30 June 2023
Cash Converters International Limited
5
Letters to Shareholders
Managing Director’s Shareholder Letter
I am proud to lead a passionate global team of people at Cash Converters - across our store operations, head
office and loan assessing centres. Our culture is one of caring for our customers and each other, whilst remaining
focused on execution and delivery.
It is for these reasons we have delivered a strong financial result, enabling our business to continue to capitalise
on growth opportunities as they present. I look forward to working with the team to continue delivering long
term value for all stakeholders and I wanted to take this opportunity to thank everyone across our global
business who contributed to this terrific result.
Financial result We are pleased to report strong financial operating results for the full year, powered by our
lending business. Increasing revenue growth was delivered, up 23% on the prior year to $302.697 million.
Operating EBITDA of $57.236 million and an operating profit after tax of $20.104 million reflected the underlying
earnings momentum across our business. The underlying earnings result continues to ensure a strong balance
sheet and cash position after funding loan book growth, store acquisitions and capital returns to shareholders.
Market backdrop Throughout FY2023 we experienced strong underlying demand, receiving a record number of
applications for our personal finance lending solutions, up 21% on the previous year. As cost-of-living pressures
impacted our customers, we experienced an increase in lending, up 24% on FY2022 to $348.039 million. This
resulted in increase in our total gross loan book to a new record level of $271.355 million as at 30 June 2023 (up
27% on the end of FY2022).
Strategic shift This result has been delivered as we continue to make significant progress executing a strategic
product transition, taking the decision to exit the Small Amount Credit Contract (SACC) market. Over recent
years we have remained focused on developing products that lower borrowing costs for our customers. Growth
in the Medium Loan book, up 34% on FY2022 to $101.957 million, reflects the successful execution of this
strategy. We are also excited by the release and performance of new loan products, in particular a Line of Credit
loan product, providing a range of solutions for customers.
Store operations Our store operations remain an important channel for our customers and performed well,
growing revenue at 15% throughout the period. Altering our inventory mix to focus on higher value items (e.g.,
prestige watches, designer handbags, electronics and jewellery) has yielded an improvement in overall sales
trading activity and gross margins. Our retail business model is unique, dependent on customers selling items to
feed store inventory and we continue to focus on our contribution to a circular and sustainable consumption
economy as we work to eliminate landfill, by re-purposing pre-owned goods. Our business model remains
integrated with our multi-channel operation enabling customers to transact seamlessly online and through our
stores.
Outlook Several strategic initiatives executed across our global business have begun delivering revenue growth.
Our store network is growing, our digital platforms are reaching a growing number of new younger customers,
new product innovation is delivering new and growing loan books and franchise store acquisitions continue.
Leveraging our scale to pivot our Company as we transition out of the SACC market provides an exciting
opportunity to consolidate our position as the largest and most recognised lender in our markets. The strategic
building blocks for the future era of Cash Converters are now in place and the management team is excited to
be able to continue capitalising on growth opportunities.
In closing, I would like to thank my colleagues across the business, for their unwavering focus on our customers
and for delivering this result. I would also like to thank the Board and shareholders for their continued support.
Sam Budiselik
Managing Director
30 June 2023
Cash Converters International Limited
6
Operating and financial review
Operating and financial review
Cash Converters International Limited (“Cash Converters” or “the Company”) and entities controlled by the
Company and its subsidiaries (“the Group”) is diverse, generating earnings from personal finance, vehicle
finance, consumer retail store operations and franchising and is supported by a corporate head office in Perth,
Western Australia.
Global network: The Company is a consumer lender and second-hand goods retailer with owner operated
(corporate) and franchise operated stores across Australia and overseas. Key corporate markets include
Australia, New Zealand and the United Kingdom – with large franchise operations spanning Europe, South Africa
and parts of Asia. In total, as at the date of this report, there are 683 stores operating across 14 countries.
Key financial performance highlights:
The strength of the Company’s diversified and integrated business model has continued to underpin the
customer service proposition with physical store assets complementing industry-leading online digital assets.
The business generates multiple revenue streams with a significant portion of its profit derived from its lending
operations. Other profit is generated from owner operated and franchise operated store operations (license
fees and franchise originated loan commissions).
30 June 2023
Cash Converters International Limited
7
Operating and financial review
A strong operating result was achieved in the financial year, compared to the previous corresponding year, as
outlined in the table below:
As reported
Operating 1
2023
$’000
302,697
(97,155)
(91,019)
(75,019)
(62,587)
2022
$’000
245,937
11,177
15,385
27,850
41,532
2023
$’000
302,697
20,104
28,804
44,804
57,236
2022
$’000
245,937
19,014
26,581
39,046
52,728
Total Revenue
(Loss) / profit after tax
(Loss) / profit before tax
EBIT 2
EBITDA 2
1
2
The operating results are presented excluding a non-cash impairment expense after tax of $110.481 million against Goodwill, a
non-cash impairment expense after tax of $4.670 million (2022: $7.837 million) on the carrying value excluding goodwill of the
assets of certain individual corporate stores and before the recognition of a net $2.108 million after tax on a non-recurring
indirect tax recovery as well as merger and acquisition costs. The operating result is presented to aid the comparability and
usefulness of the financial information reflecting the underlying performance of the business. This information should be
considered in addition to, but not instead of or superior to, the Group’s financial statements prepared in accordance with IFRS.
The operating results presented may be determined or calculated differently by other companies, limiting the usefulness of those
measures for external comparative purposes.
The Company reports EBIT calculated as earnings before interest expense and tax and EBITDA calculated as EBIT before
depreciation and amortisation. EBIT and EBITDA are non-IFRS measures and are alternative performance measures reported in
addition to but not as a substitute for the performance measures reported in accordance with IFRS. These measures focus directly
on operating earnings and enhance comparability between periods. The non-IFRS measures calculated and disclosed have not
been audited in accordance with Australian Accounting Standards although the calculation is compiled from financial information
that has been audited.
Revenue growth of 23% has seen the interest earned on the growing personal and vehicle finance loan book,
retail sales and franchise fees earned return to the longer-term trend, off the back of a COVID-19 affected
comparative period. The operating profit increase reflects underlying earnings momentum increasing as the loan
book continues to grow and bad debt levels are managed. Statutory profit was impacted by one-off non-cash
impairments resulting from legislative changes (1HFY23).
Non-cash impairment to goodwill
A one-off non-cash impairment charge of $110.481 million before tax was recognised by the Company in
1HFY23. This was made up of $90.562 million against the Personal Finance cash generating unit and $19.919
million against the Store Operations group of cash generating units. The impairment recognised is as a result of
legislative changes impacting the Small Amount Credit Contracts (”SACC”) product.
The Financial Sector Reform Act 2022 (“the Act”) which was passed by the Senate in December 2022 contains a
number of Financial Services legislative changes that focus on the enhanced regulation of the SACC loan products
offered by the Company. The most material impact resulting from these changes is the extension of the
Protected Earnings Amount (“PEA”) cap requirement, which determines how much of a consumer’s income can
go towards repaying SACC loans. This applies to all consumers (including those fully employed) and lowers it
from 20% to 10% of a consumer’s net income. Previously, the PEA cap only applied to Centrelink recipients. The
PEA cap change came into effect for loans advanced from 12 June 2023.
Responding to legislative changes is a complex process that requires the application of significant judgement to
estimate the reduction in SACC loan volumes due to the PEA cap amendment, requiring an estimation of
customer behaviour and estimating the discount rate to the forecast cash flows to determine net present value.
Impairment testing completed by the Company has supported the conclusion that there was a requirement for
a goodwill impairment charge as a result of the legislative changes.
30 June 2023
Cash Converters International Limited
8
Operating and financial review
The impairment charge is one-off, non-cash in nature and a non-operating item. Therefore, underlying EBITDA
and net profit after tax have been adjusted in FY2023. Going forward, these changes will impact the forecast for
SACC related earnings in future financial years. The management team remains focused on delivering an exciting
new product pipeline, in addition to executing on organic and inorganic strategic initiatives as outlined in
previous market updates, to ensure the Company remains in the best possible position to assist customers who
are impacted by these changes and to address the expected earnings impact.
See note 5 in the accompanying Financial Report for additional information on the impairment.
Summary of consolidated revenues and results by significant segment
Segment revenues
Operating basis 1
Segment EBITDA 2
30-Jun-22
$’000
30-Jun-23
$’000
94,336
12,149
123,637
-
10,962
241,084
4,853
245,937
50,564
6,078
20,575
(833)
3,339
79,723
(22,487)
57,236
30-Jun-22
$’000
44,111
7,972
16,486
853
3,042
72,464
(19,736)
52,728
30-Jun-23
$’000
114,032
15,048
142,045
13,810
11,404
296,339
6,358
302,697
Personal Finance
Vehicle Financing
Store Operations
New Zealand
UK
Total
Head Office & Eliminations
Total
Depreciation and amortisation expense
Finance costs
(Loss) / profit before tax
Income tax expense
(Loss) / profit for the period
As reported basis
Segment EBITDA 2
30-Jun-23 30-Jun-22
$’000
(39,997)
6,078
(5,097)
(833)
741
(39,108)
(23,479)
(62,587)
(12,432)
(16,000)
(91,019)
(6,136)
(97,155)
$’000
44,111
7,972
5,290
853
3,042
61,268
(19,736)
41,532
(13,682)
(12,465)
15,385
(4,208)
11,177
1
2
The operating results are presented excluding a non-cash impairment expense after tax of $110.481 million against Goodwill, a
non-cash impairment expense after tax of $4.670 million (2022: $7.837 million) on the carrying value excluding goodwill of the
assets of certain individual corporate stores and before the recognition of a net $2.108 million after tax on a non-recurring
indirect tax recovery as well as merger and acquisition costs. The operating result is presented to aid the comparability and
usefulness of the financial information reflecting the underlying performance of the business. This information should be
considered in addition to, but not instead of or superior to, the Group’s financial statements prepared in accordance with IFRS.
The operating results presented may be determined or calculated differently by other companies, limiting the usefulness of those
measures for external comparative purposes.
The Company reports EBIT calculated as earnings before interest expense and tax and EBITDA calculated as EBIT before
depreciation and amortisation. EBIT and EBITDA are non-IFRS measures and are alternative performance measures reported in
addition to but not as a substitute for the performance measures reported in accordance with IFRS. These measures focus directly
on operating earnings and enhance comparability between periods. The non-IFRS measures calculated and disclosed have not
been audited in accordance with Australian Accounting Standards although the calculation is compiled from financial information
that has been audited.
Key segment financial performance
As illustrated in the table above, revenue growth across the various business segments reflected the appeal of
our unique business model to a growing number of customers, offering cash solutions that include unsecured
personal loans through our Personal Finance segment, Vehicle Loans, Store based second-hand retail trading
and pawnbroking loans and Franchise royalty collection (globally).
Each of the segments saw revenue growth when compared to the prior corresponding period, with inflationary
pressures increasing the cost of living, resulting in an increase in overall demand for the Company’s products
and services. Through FY2023, the gross loan book has grown to a record $271.355 million (2022: $213.950
million) with principal advanced increasing 23.9% on the prior year.
30 June 2023
Cash Converters International Limited
9
Operating and financial review
The Personal Finance segment currently reflects earnings from two types of unsecured loans; Small1 and
Medium2 loans, distributed online and instore. Small loans consist of SACC loans and the recently launched
PayAdvance product. The Medium loan book grew 34% from 30 June 2022 and it is anticipated this loan book
growth trend will continue. Whilst in it’s infancy, the new Line of Credit product is forecast to grow strongly.
We continue to make significant progress executing on the strategic product transition away from the SACC
Small loan product segment, due to legislative changes. Where suitable, we will offer impacted customers an
alternative product, ensuring they have access to longer term, lower cost finance options as a result. Reflecting
the success of this product strategy was the Medium loan book growth, up 34% on FY2022 closing the period at
$101.957 million. We are also excited by the release and performance of other new loan products enabling this
customer transition.
Vehicle Financing, offered through a network of brokers and dealers by our wholly owned subsidiary, Green
Light Auto Group Pty Ltd, continues to recover after a period of COVID-19 related supply disruption which
impacted second hand vehicle prices and COVID-19 subsidies which affected customer demand. Applications
increased 27% on the prior year to in excess of 5,400 applications for vehicle finance received and the Vehicle
Financing gross loan book grew 35% from 30 June 2022 to $62.914 million.
1 Small loans include: Small Amount Credit Contract (“SACC”): a regulated unsecured personal loan product, transacted in-store and online,
up to $2,000 and up to 12 months; PayAdvance: has a one-off fee of 5% applied upon repayment, to an advance on earned, but not yet
received salary or wages, with no other fees or charges applied; 2 Medium loans include: Medium Amount Credit Contract (“MACC”): a
regulated unsecured personal loan product, transacted in-store and online, up to $5,000 and up to 24 months. Line of Credit (“LOC”): a
regulated unsecured personal loan product, transacted in-store and online, up to $10,000 and up to 36 months. Approved credit limit can
be accessed by the customer during the life of the loan.
Principal advanced1
Personal Finance
Vehicle Finance
Store Operations
New Zealand
Total
30-Jun-23
$’000
30-Jun-22
$’000
Variance
228,582
34,107
71,002
14,348
348,039
196,433
21,772
62,687
-
280,892
16.4%
56.7%
13.3%
nm
23.9%
Principal advanced represents the cash amount of loan funding disbursed to customers.
1
nm Not meaningful.
30 June 2023
Cash Converters International Limited
10
Operating and financial review
Gross loan books
Personal Finance
Vehicle Finance
Store Operations
New Zealand
Total
nm Not meaningful.
Loan book performance
30-Jun-23
$’000
30-Jun-22
$’000
Variance
%
178,328
62,914
17,628
12,485
271,355
149,500
46,695
17,755
-
213,950
19.3%
34.7%
-0.7%
nm
26.8%
Two loan book loss related expenses impact the profit or loss statement:
1. Net bad debt expense: net bad debt expense for the period was $49.312 million, up from $28.638
million in the prior period. This was expected due to the significant loan book growth throughout the
period. Whilst the bad debt written off has increased in line with the larger loan books, the net loss rate
remains in line with historical levels at 11.0% for 2HFY23.
2. Expected credit loss allowance (“ECL”): success in growing the loan book will result an ECL expense in
the same accounting period (up front expense) whilst deteriorating loans written in a prior period (e.g.,
due to missed payments) may see adjustments made.
The ECL allowance model is forward-looking, requiring significant judgement and does not require evidence of
an actual loss event for an allowance to be recognised. The favourable variance in the ECL expense is driven by
an improvement in the ECL provision as a percentage of the gross loan book. The ECL improvement is due to an
increase in credit quality as well as the availability of better quality data upon which to base modelled
assumptions combined with enhancements in the model methodology applied.
The overall blended ECL allowance as a percentage of the gross loan book for the year ending 30 June 2023 is
17.18% (30 June 2022: 17.90%). Appropriate reserves have been incorporated including for an assessment of
economic risk and the impact of modelling risk.
The net loss rate (net bad debt expense / average gross loan book) for 2HFY23 was 11.0% and in line with
expectations, compared to 8.6% for 1HFY23.
30-Jun-23
$’000
30-Jun-22
$’000
Variance
%
Bad debts written off
Recovery of bad debts written off
Net bad debt expense
Movement in expected credit loss allowance
Total loan related bad debts and allowances
55,483
(6,171)
49,312
5,071
54,383
36,684
(8,046)
28,638
6,186
34,824
51.2%
-23.3%
72.2%
-18.0%
56.2%
30 June 2023
Cash Converters International Limited
11
Operating and financial review
Key financial position highlights
Cash and cash equivalents
Net loan receivables
Trade and other receivables
Inventories
Intangible assets
Goodwill
Right of use assets
Tax assets
Investment in associate
Plant & equipment
Total Assets
Borrowings
Lease liabilities
Other liabilities
Total Liabilities
Total Equity
30-Jun-23
$’000
30-Jun-22
$’000
Variance
%
71,565
224,729
12,763
26,493
20,543
3,279
47,046
29,669
-
6,582
442,669
136,991
63,742
35,442
236,175
58,085
175,653
7,016
23,944
127,470
110,481
50,221
26,089
4,868
4,842
478,188
68,365
64,817
29,654
162,836
23.2%
27.9%
81.9%
10.6%
20.9%
-97.0%
-6.3%
13.7%
-100.0%
35.9%
-7.4%
100.4%
-1.7%
19.5%
45.0%
206,494
315,352
-34.5%
The Group closed the reporting period with a strong balance sheet even after the goodwill impairment charge.
Net tangible asset per share is 29.11 cents per share (30 June 2022: 29.94 cents per share).
Since 30 June 2022, the net loan book has grown by 27.9% and Corporate Store inventory has increased by
10.6%, following a disrupted period of COVID-19 related lockdowns in the previous period.
The Group’s cash and cash equivalent carrying value is $71.565 million (30 June 2022: $58.085 million) after
funding loan book growth, the acquisition of Cash Converters New Zealand and funding of the loan to the master
franchisor in Spain.
The Group reported a net cash increase of $12.848 million (2022: $13.625 million utilised). Net operational cash
outflow from operating activities was $11.536 million (2022: $7.909 million inflow). Financing activities included
dividend payments of $12.550 million (2022: $12.550 million). Cash outflows from investing activities of $22.628
million (2022: $1.886 million inflow) included $4.679 million (2022: nil) to fund a loan to the Spain master
franchisor and $13.798 million (2022: $3.144 million) invested in business combination acquisitions.
The undrawn securitisation facility funding line is $11.750 million (30 June 2022: $79.750 million) and the Group
is in compliance with the requirements of the facility.
The disciplined evaluation of investment opportunities and allocation of capital continues and with a strong
balance sheet in place the Board has, with the results release, declared a fully franked final dividend of 1 cent
per fully paid ordinary share.
30 June 2023
Cash Converters International Limited
12
Operating and financial review
Execution on strategy
Growth strategy: As previously advised, new product development and selected domestic and international
franchise acquisition targets remain a focus. The objective is to acquire earnings accretive store networks, based
on sensible valuation metrics, which will accelerate Group earnings in the longer term.
New Product Development
Following the successful launch of the new PayAdvance product, a new Line of Credit product that was
successfully piloted in the second half of FY2023 has been released into production. These new products will
play an important role in the composition of the Company’s future loan book and are not impacted by the recent
regulatory changes, assisting customers impacted by the recent legislative changes, where suitable.
New Zealand – Cash Converters Franchise Acquisition
During the period the Group acquired the remaining 75% of Cash Converters New Zealand for $13.798 million,
net of cash and cash equivalents acquired, including 11 Corporate stores and the rights to various franchise fees
from a further 11 Franchise stores. Cash Converters New Zealand is now a 100% owned subsidiary of CCIL.
The finalisation of this transaction allows the Group to fully integrate the Cash Converters brand, stores, and
people in New Zealand into the wider corporate operation.
See note 14 in the accompanying Financial Report for additional information on the business combination.
30 June 2023
Cash Converters International Limited
13
Operating and financial review
United Kingdom – Capital Cash Franchise Acquisition
The Company announced the execution of a Sale and Purchase Agreement (“SPA”) for the acquisition of Capital
Cash Ltd (“Capital Cash”) during the period, our largest franchise group in the United Kingdom (UK). Capital Cash
operates 42 stores across England, which offer pawnbroking, buyback and retailing of second-hand goods.
Cash Converters entered into an SPA to acquire 100% of the ordinary shares in Capital Cash for total
consideration of up to 13.9 million GBP (approximately $26.5 million AUD at 30 June 2023).
The SPA conditions were all satisfied or waived by 6 July 2023. Cash Converters UK Holdings Ltd (“CCUK”)
completed the acquisition through a cash settlement on 6 July 2023 and attained 100% ownership and control
of Capital Cash on 6 July 2023.
See note 15 in the accompanying Financial Report for additional information on the post balance date business
combination.
Cyber security
The cyber security landscape continues to evolve rapidly, and Cash Converters acknowledges the extreme level
of cyber risk associated with our operations, particularly given the nature of the sensitive customer information
we handle in delivering our consumer financial services at high volumes in Australia, the United Kingdom, and
New Zealand. This sensitive data, if compromised, could have profound implications on our customers, business
reputation, and financial performance.
Recognising the criticality of this risk, Cash Converters is committed to safeguarding our customers, stakeholders
and the data we manage. We have already embarked on significant investments in cybersecurity and have an
established information security function that makes continuous risk-prioritised improvements to our digital
infrastructure, cyber resilience and exposure to cyber threats. We remain vigilant and dedicated to upholding
the trust our shareholders and customers have placed in us.
Cyber security is the practice of protecting systems, networks, programs, sensitive data and employees from
digital attacks. Cash Converters utilizes global third-party security providers to ensure an ongoing program of
monitoring, testing and remediation. Working in conjunction with regulators and considering best practices
globally, the Group is proactive in its approach to ensuring cyber security.
Culture and people
The values and culture of Cash Converters are the foundation of its success and the reason it has continued to
operate for almost 40 years. The Company recognises the importance of its reputation and standing within the
community and with its key stakeholders, such as customers, employees, suppliers, creditors, law makers and
regulators.
Employees are encouraged to embrace our Cash Converters values, which are introduced during induction and
kept alive through ongoing training programs, internal communications and recognition schemes. Behaviours
aligned with these values are measured annually as a part of our performance reviews and are acknowledged
and rewarded through our recognition programs and Annual Performance Awards. Each year we recognise
employees through awards such as Values and Brand Champion.
30 June 2023
Cash Converters International Limited
14
Operating and financial review
The Values Statement is encapsulated as follows:
We’re real people who are passionate and proud
• We’re genuine, friendly and from your neighbourhood. We’re passionate and proud to be here
helping our customers.
We’re caring and respectful
• We’re here to listen and find ways to help makes things possible, supportive of our customers and
our colleagues. There’s no judgement here. We treat everyone as an individual.
We’re tenacious problem solvers
• We don’t back down. We always try our best to help others, no matter how hard the task seems.
Business Risk Assessment
Like all businesses, Cash Converters faces uncertainty and the ability to understand, manage and mitigate risk
provides a competitive advantage.
The Company’s ability to accurately assess value, purchase and sell quality consumer goods at appropriate prices
is influenced by many factors. Whilst acknowledging these risks, the depth of skill and experience in this
specialist area is a source of competitive advantage for Cash Converters.
During a period of rising interest rates and inflationary pressure the ability to service the circular economy
though provision of recycled goods is a competitive advantage. The business process has focussed on ensuring
the customer buying process, which has not suffered from supply chain disruption, is convenient and
competitive and results in a continued ability to generate an appropriate margin.
As a responsible provider of personal finance products there is an inherent risk that customers may not meet
their expected repayments as they manage their financial commitments. A continued discipline remains in both
the management of credit risk as well as commitment to the highest possible responsible lending standards.
Cash Converters’ success in working with customers over time is based on many factors that mitigate compliance
risk and risk of default with those who may subsequently experience financial difficulty. These include:
•
•
•
•
Treating customers with empathy, care, and respect;
Investing in engagement methods to provide customers with freedom of choice;
Efficient and thorough understanding and assessment of customer eligibility prior to origination; and
A value-driven culture where a premium is placed on customer service and unlocking possibilities together.
Whilst the aim of responsible lending policies and a customer-first approach is to minimise risk, credit risk is
influenced by factors outside the control of Cash Converters such as unemployment, relative income growth,
consumer confidence and interest rates. The risk of default is ever-present. Cash Converters often has the
advantage in offering credit products to customers that it has served over many years and knows well, affording
a unique opportunity to provide a high level of service.
Cash Converters welcomes the industry emphasis towards non-financial risk, including conduct and culture as
well as detecting, deterring, and disrupting criminal abuse of the financial system. The Company views these
commitments as an area of continuous improvement and continues to strengthen its risk management and
compliance capabilities while engaging transparently with financial service sector regulators (ASIC and
AUSTRAC).
30 June 2023
Cash Converters International Limited
15
Operating and financial review
As announced to the market on 21 February 2023, the Company has undertaken an uplift program to address
shortcomings in its compliance with Anti-Money Laundering and Counter-Terrorism Financing (“AML/CTF”) laws.
Cash Converters entered an Enforceable Undertaking with AUSTRAC to demonstrate this commitment and the
process continues to progress according to the timeframe committed to AUSTRAC.
There has been a marked increase in cyber-criminal activities globally over the last year that impact all
companies, large and small, but which also pose a greater risk to those companies with a large online customer
base. The Company’s cyber defences continue to be enhanced with a focus on educating team members on the
threats of cyber-crime activities.
Outside of these exists the accepted risks of regulatory change, poorly executed strategy, failure to respond
appropriately to changes in technology and the threat posed through competitor behaviours, all of which are a
source of constant consideration and review by the Company’s management team and Board of Directors.
Outlook
Whilst demand for our products is at an all-time high, and with our loan books growing rapidly, our focus on a
culture of robust risk and compliance has developed into a central strategic pillar of all that we do.
From a position of balance sheet strength, closing the financial year with $71.565 million in Cash and cash
equivalents, we remain focused on executing strategic initiatives across the business.
Throughout the financial year these initiatives have begun delivering revenue growth, with our digital platforms
reaching a growing number of new younger customers, new product innovation delivering new growing loan
books and value accretive franchise store and network acquisitions continuing. Leveraging our scale to pivot our
Company provides an exciting opportunity to consolidate our position as the largest and most recognised lender
in our markets, with the strategic building blocks for the future era of Cash Converters now in place.
Due to the confidence the Board has in our balance sheet strength and earnings run-way, a final 1c fully franked
dividend was declared for our shareholders. This is the sixth straight half yearly interval dividend payment of
this amount. The Board and management team are excited to be in a strong position to drive the Company
forward.
30 June 2023
Cash Converters International Limited
16
Directors’ report
Directors’ report
The directors of Cash Converters International Limited submit the following report of the Company for the
financial year ended 30 June 2023. To comply with the provisions of the Corporations Act 2001, the directors
report as follows:
Information about directors
The following persons held office as directors of the Company during the whole of the financial year and until
the date of this report unless otherwise stated:
Mr Timothy Jugmans – Non-Executive Chairman
Appointed director and chairman 1 April 2022
Mr Jugmans is the Chief Financial Officer (“CFO”) of EZCORP Inc (“EZCORP”). Mr Jugmans joined EZCORP in
December 2016 as Vice President, Treasury and M&A, having served as a consultant performing similar duties
since March 2015. He was appointed CFO in May 2021 after serving as interim CFO since September 2020.
Mr Jugmans has 25 years’ experience providing strategic and financial services advice for a variety of companies,
including seven years with Lexicon Partners Pty Limited, an independent corporate advisory and consulting firm
based in Sydney, Australia. From January 2015 to December 2016, Mr Jugmans was a principal of Selene Partners
Inc., a financial consulting firm providing strategic advice and other business services to a variety of clients,
including the Company and Morgan Schiff & Co., Inc. He served as the CFO of Morgan Schiff from April 2013 to
December 2014, and was CFO of ShippingEasy, Inc. from July 2011 to April 2013.
From April 2015 to April 2021, Mr Jugmans served as a non-executive Board member and Chairman of Ratecity
Pty Ltd, which operates one of Australia’s leading financial comparison sites.
Mr Jugmans has a Bachelor of Business degree with a major in Finance and a minor in Mathematics from the
University of Technology in Sydney.
Mr Jugmans is on the Company’s Board as a nominee of significant shareholder, EZCORP and as Chairman,
pursuant to the Subscription Agreement dated 17 August 2009 between EZCORP and the Company (released to
ASX on 9 November 2009). Accordingly, he is not considered to be an independent director.
Over the past 3 years Mr Jugmans has not held any directorships with other listed companies.
Mr Lachlan Given – Non-Executive Director
Appointed director 22 August 2014
Mr Given is the Chief Executive Officer (“CEO”) of EZCORP, Inc. (appointed April 2022) and was reappointed as
a director of the EZCORP Board in March 2022, having previously served as non-executive Chairman of the
EZCORP Board of Directors from July 2014 to September 2019. Before joining EZCORP, Mr Given provided
financial and advisory services to EZCORP through his own business and financial advisory firm.
Mr Given is a member of the Board of Directors of The Farm Journal Corporation, a 134-year old preeminent US
agricultural media company. Mr Given is also a director of encryption solutions company Senetas Corporation
Limited; and leading financial services rating and research firm CANSTAR Pty Ltd.
Mr Given began his career working in the investment banking and equity capital markets divisions of Merrill
Lynch in Hong Kong and Sydney, Australia, where he specialised in the origination and execution of a variety of
M&A, equity and equity linked and fixed income transactions.
Mr Given graduated from the Queensland University of Technology with a Bachelor of Business, majoring in
Banking and Finance (with distinction).
30 June 2023
Cash Converters International Limited
17
Directors’ report
Mr Given is on the Company’s Board as a nominee of significant shareholder, EZCORP, pursuant to the
Subscription Agreement dated 17 August 2009 between EZCORP and the Company (released to ASX on 9
November 2009). Accordingly, he is not considered to be an independent director.
Over the past 3 years Mr Given has held directorships with the following listed companies:
Company
Senetas Corporation Limited
EZCORP Inc
Commenced
20 March 2013
3 March 2022
Ceased
-
-
Mr Sam Budiselik – Managing Director
Appointed director 18 December 2020
Mr Budiselik was appointed Managing Director in December 2020 and has been with the Company since 2016.
Mr Budiselik was appointed as CEO in February 2020 after serving as Chief Operating Officer (“COO”) and interim
CEO. Before joining Cash Converters, he was COO at the stockbroking and wealth management firm Paterson’s
Securities, in addition to holding a number of director positions across franchise, consulting and commercial
drone businesses.
Mr Budiselik has spent a total of 12 years abroad during his career working for investment banks UBS and
Barclays Capital in London, New York and Singapore before returning to Australia.
Over the past 3 years Mr Budiselik has not held any directorships with other listed companies.
Mr Peter Cumins – Executive Deputy Chairman
Appointed director April 1995
Appointed Executive Deputy Chairman 23 January 2017
Mr Cumins joined the Company in August 1990 as Finance and Administration Manager when the Company had
23 stores, becoming General Manager in March 1992. He became Managing Director in April 1995. Mr Cumins
moved from this role to the role of Executive Deputy Chairman on 23 January 2017.
Mr Cumins is a qualified accountant and has overseen the major growth in the number of franchisees in Australia
as well as the international development of the Cash Converters franchise system. His experience in the
management of large organisations has included senior executive positions in the government health sector,
specifically with the Fremantle Hospital Group, where he was Finance and Human Resources Manager.
Over the past 3 years Mr Cumins has not held any directorships with other listed companies.
Ms Julie Elliott – Non-Executive Director
Appointed director 14 April 2020
Ms Elliott has over 30 years’ experience in both executive and director roles across banking, financial services
and government. In her executive career she held the role of CEO of Bank of Sydney, as well as senior leadership
roles at Westpac, NAB and KPMG with experience in strategy, marketing, product, finance, audit and sales.
Ms Elliott is a director and the chair of the Governance and Remuneration Committee of Police and Nurses
Limited, a director of Grow Finance Limited and EBA Foundation. Ms Elliott is also a chair and member on several
NSW Government Audit and Risk Committees including chair of NSW Treasury. She has previously held the role
of Chair of State Trustees Limited and Metropolitan Fire and Emergency Services Board.
30 June 2023
Cash Converters International Limited
18
Directors’ report
Ms Elliott brings extensive operational, financial and Board experience. She is a fellow of FINSIA, the Australian
Institute of Company Directors and Chartered Accountants Australia and New Zealand. She holds an MBA and a
Bachelor of Economics.
Ms Elliott is the Chair of the Company’s Governance, Remuneration and Nomination Committee, and a member
of the Audit and Risk and Board Investment Committees.
Over the past 3 years Ms Elliott has not held any directorships with other listed companies.
Mr Robert Hines – Non-Executive Director
Appointed director 14 April 2020
Mr Hines brings over 30 years’ experience in banking and finance services, agriculture and energy sectors with
senior executive roles focusing on finance, retail and operations.
Mr Hines has held executive positions of CFO and/ or COO at some of Australia’s leading companies; Queensland
Sugar Limited, QIC Limited, Bank of Queensland Limited, Energex Retail Limited, Tarong Energy Limited and
Suncorp Group Limited. In addition, Mr Hines served as Group CFO for NatWest Markets and was a Director CFO
Advisory with KPMG. Mr Hines joined the Board of Humm Group Limited in September 2022, and was appointed
as a director of Mackay Sugar Limited in August 2022.
Mr Hines brings extensive operational and financial expertise to the Board. He is a senior fellow of FINSIA and a
fellow of the Australian Institute of Company Directors, Chartered Accountants Australia and New Zealand and
CPA Australia.
Mr Hines is the chair of the Company’s Audit and Risk and Board Investment Committees, and a member of the
Governance, Remuneration and Nomination Committee.
Over the past 3 years Mr Hines has held a directorship with the following listed company:
Company
Humm Group Limited
Commenced
29 September 2022
Ceased
-
Mr Henry Shiner – Non-Executive Director
Appointed director 1 July 2021
Mr Shiner has accumulated experience over many years of Senior Executive Management and Strategic
positions, most recently in the Quick Service Restaurant industry, where he held the positions of Vice President,
Chief Information Officer of McDonald’s APAC and then as Vice President Global Financial Transformation – IT,
at McDonald’s Corporation. Mr Shiner has held Non-Executive Director roles on the National Board of Ronald
McDonald Charities, Craveable Brands, DragonTail Systems, NoahFace, Guroo Producer, Slikr and Advisory Board
roles with numerous other companies.
Prior to McDonald’s, Mr Shiner held Senior Executive positions in Norske Skog, Fletcher Challenge Paper,
Honeywell Ltd and AGL. His experience across these markets have included leading strategic planning,
technology strategy and development, franchising, cyber security, manufacturing operations and governance
and quality management.
30 June 2023
Cash Converters International Limited
19
Directors’ report
In addition to an honours degree in Chemical Engineering, Mr Shiner has graduated in Management Studies
focused on Global Strategy execution from the IMD School in Lausanne, Switzerland and is a member and
graduate of the Australian Institute of Company Directors.
Mr Shiner is a member of the Company’s Governance, Remuneration and Nomination, Audit and Risk and Board
Investment Committees.
Over the past 3 years Mr Shiner has held a directorship with the following listed company:
Company
Dragontail Systems Limited*
*Dragontail System Limited is no longer a listed entity however it was at one point during the prior 3 years.
Ceased
13 September 2021
Commenced
13 May 2020
Ms Susan Thomas – Non-Executive Director
Appointed director 1 April 2022
Ms Thomas has over 30 years’ experience in the financial services and information technology sectors, having
founded and acted as Managing Director of FlexiPlan Australia Limited, which was subsequently sold to
MLC/NAB.
Ms Thomas is an experienced company director and risk committee chair with expertise in technology and law.
Ms Thomas is currently a director of ASX listed companies Fitzroy River Corporation Limited, Nuix Limited and
Maggie Beer Holdings Limited.
Ms Thomas holds a Bachelor of Law and Bachelor of Commerce from the University of New South Wales and
has received a diploma from the Australian Institute of Company Directors.
Ms Thomas is a member of the Governance, Remuneration and Nomination, Audit and Risk and Board
Investment Committees.
Over the past 3 years Ms Thomas has held directorships with the following listed companies:
Company
Fitzroy River Corporation Limited
Temple and Webster Group Limited
Nuix Limited
Maggie Beer Holdings Limited
Commenced
26 November 2012
23 February 2016
18 November 2020
1 July 2022
Ceased
-
30 November 2022
-
-
Directors’ shareholdings
The following table sets out each director’s relevant interest in shares and options in shares of Cash Converters
International Limited as at the date of this report:
Directors
Mr T Jugmans
Mr L Given
Mr S Budiselik
Mr P Cumins
Ms J Elliott
Mr R Hines
Mr H Shiner
Ms S Thomas
Fully paid ordinary shares
Number
-
-
5,627,473
9,810,694
61,379
822,000
-
613,985
Share options
Number
-
-
11,485,472
-
-
-
-
-
30 June 2023
Cash Converters International Limited
20
Directors’ report
Company Secretaries
Mr Leslie Crockett
Appointed with effect from 1 July 2021 and resigned 31 December 2022
A chartered accountant, Mr Crockett has experience working across a range of industries including financial
services, property development, construction, retail and manufacturing covering jurisdictions in Australia,
Europe, the United Kingdom, Africa, the USA, and the Caribbean. Prior to joining Cash Converters in June 2020,
he was the Chief Financial Officer of a listed financial services group for over seven years and served there as
the Company Secretary from early 2013 to September 2015. Mr Crockett qualified as a chartered accountant
with Deloitte, where he provided audit, consulting, financial advisory, risk management and tax services. He
holds a Bachelor of Accounting Science from the University of South Africa and business qualifications from
Melbourne Business School and the University of Southern Queensland and is a member and graduate of the
Australian Institute of Company Directors. Mr Crockett also held the role of Chief Financial Officer until his
resignation on 31 December 2022.
Mr Sonu Cheema
Appointed with effect from 31 December 2022 and resigned 12 April 2023.
Mr Cheema is a CPA with over 12 years’ experience working with public and private companies in Australia and
abroad. Mr Cheema has completed a Bachelor of Commerce majoring in Accounting at Curtin University.
Ms Kelly Moore and Ms Meagan Hamblin
Appointed Joint Company Secretaries with effect from 12 April 2023
Ms Moore is a qualified Chartered Accountant and Company Secretary with extensive experience in providing
accounting and secretarial advice to public companies. Ms Moore is a director of Meridian Corporate
Consultants and holds a Bachelor of Commerce degree from the University of Western Australia. Ms Moore is a
member of Chartered Accountants Australia and New Zealand, is a graduate of the Australian Institute of
Company Directors and an associate member of the Governance Institute of Australia.
Ms Hamblin is a qualified Chartered Accountant and graduate of the Governance Institute of Australia. Ms
Hamblin is a director of Meridian Corporate Consultants specialising in providing financial reporting, corporate
governance and advisory services for both public and private companies. Ms Hamblin has previously worked in
the statutory reporting team at Wesfarmers Ltd and in the audit and advisory team at Deloitte Perth. Ms Hamblin
holds a Bachelor of Commerce degree from the University of Western Australia.
Principal activities
The principal activity of Cash Converters International Limited and its subsidiaries (“the Group”) is that of a
franchisor, retailer of second-hand goods and financial services, a provider of secured and unsecured loans and
the operator of corporate stores in Australia and New Zealand, all of which trade under the Cash Converters
name.
Country master franchise licences are also sold to licensees to allow the development of the Cash Converters
brand but without the need for support from Cash Converters International Limited.
Review of operations
The Group’s net loss attributable to members of the parent entity for the year ended 30 June 2023 was $97.155
million (2022: $11.177 million profit) after an income tax charge of $6.136 million (2022: $4.208 million). A
review of the Group’s operations and financial performance has been provided on pages 7 to 16.
The Group reported an operational profit after tax of $20.104 million (2022: 19.014 million).
30 June 2023
Cash Converters International Limited
21
Directors’ report
Changes in state of affairs
During the financial year there were no significant changes in the state of affairs of the Company other than
those referred to elsewhere in this financial report and the notes thereto.
Subsequent events
Further to the announcement released to the market on 6 March 2023, the Group completed the acquisition of
Capital Cash Ltd (“Capital Cash”), the largest franchise group in the UK, on 6 July 2023.
Capital Cash has been operating in the UK for twenty years and currently operates 42 stores in the UK. The
business continues to perform in line with original forecasts, experiencing a rebound in loan book growth and
overall trading activity as anticipated. This strategic acquisition gives Cash Converters a corporate store footprint
in the UK, and an experienced management team who will continue to grow the Cash Converters business in the
UK, acquiring franchise stores and opening new sites across the UK to serve a growing number of customers.
This acquisition is a core part of the Company's strategy to acquire value-accretive franchise store networks,
with this acquisition establishing a corporate base to oversee our wider European operation.
Refer to note 15 in the annual report for more information on the post balance date business combination.
Future developments
Likely developments in expected results of the Group’s operations in subsequent years and the Group’s business
strategies are referred to elsewhere in this report.
Dividends
The Board of Directors of the Company have declared a final dividend of 1.00 cent per share with the release of
the final year end results and reporting date of 30 August 2023. The dividend will be 100% franked and will be
paid on 13 October 2023 to those shareholders on the register at the close of business on 15 September 2023.
With the declaration of this dividend, the Company’s Dividend Reinvestment Plan (“DRP”) remains suspended
and will not apply to this dividend.
30 June 2023
Cash Converters International Limited
22
Directors’ report
Shares under option or issued on exercise of options
Details of unissued shares or interests under option as at the date of this report are:
Issuing entity
Number of
shares under
option
Class of
shares
Exercise price
of option
Measurement
Date
Cash Converters International Limited
Cash Converters International Limited
Cash Converters International Limited
9,078,184
7,556,388
10,548,575
Ordinary
Ordinary
Ordinary
Nil
Nil
Nil
30 Jun 2023
30 Jun 2024
30 Jun 2025
The performance rights above are in substance share options with an exercise price of nil, which vest and may
potentially be exercised into ordinary shares once certain performance / vesting conditions are met.
The holders of these performance rights do not have the right, by virtue of the performance right, to participate
in any share or other interest issue other than bonus share issues of the Company or of any other body
corporate.
Performance rights are managed through the Group’s Equity Incentive Plan. Shares are acquired on market and
held as treasury shares when it is probable that the vesting conditions will be achieved.
During the period 6,259,034 shares (acquired in FY2022) were issued through the Company’s Employee Share
Trust to eligible participants. The measurement date of these vested rights was to 30 June 2022.
Indemnification and insurance of directors and officers
During the financial year, the Company paid a premium in respect of a contract insuring the directors of the
Company, the Company Secretaries and all executive officers of the Company and of any related body corporate
against a liability incurred as such a director, secretary or executive officer to the extent permitted by the
Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the
amount of the premium.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by
law, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate
against a liability incurred as such an officer or auditor.
30 June 2023
Cash Converters International Limited
23
Directors’ report
Directors’ meetings
The number of meetings of directors and meetings of committees of directors held during the year and the
number of meetings attended by each director were as follows:
Directors
Board of directors
Audit and Risk
Committee
Governance,
Remuneration and
Nomination
Committee
Mr T Jugmans
Mr S Budiselik
Mr P Cumins
Ms J Elliott
Mr L Given
Mr R Hines
Mr H Shiner
Ms S Thomas
Held Attended Held Attended Held Attended
6*
6*
5*
6
2*
6
6
6
10
10
10
10
10
10
10
10
7*
7*
7*
7
1*
7
7
7
10
10
9
10
9
10
10
9
6
6
6
6
6
6
6
6
7
7
7
7
7
7
7
7
Board Investment
Committee
Held
Attended
4
4
4
4
4
4
4
4
2*
4*
4*
4
0
4
4
4
* Denotes directors who were not a member of the Committee but attended meetings by invitation.
Non-audit services
The Board of Directors are satisfied that the provision of non-audit services, during the year, by the auditor is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The Board of Directors are satisfied that the provision of non-audit services during the year by the auditor did
not compromise the auditor independence requirements of the Corporations Act 2001, as the nature of the
services was limited to income tax and indirect tax compliance, transaction/compliance related matters and
generic accounting advice. All non-audit services have been reviewed and approved to ensure they do not
impact the integrity and objectivity of the auditor, and none of the services undermine the general principles
relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for Professional
Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing
the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as
advocate for the Company or jointly sharing economic risks and rewards.
Details of the amounts paid or payable to the auditor for non-audit services provided during the year by the
auditor are outlined in note 22 to the financial statements.
Rounding of amounts
The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financials / Directors’
Reports) Instrument 2016/191, dated 24 March 2016, and in accordance with that Corporations Instrument,
amounts in the directors’ report and the financial statements are rounded off to the nearest thousand dollars,
unless otherwise indicated.
Auditor’s independence declaration
The auditor’s independence declaration is included on page 47.
30 June 2023
Cash Converters International Limited
24
Directors’ report
Remuneration report (Audited)
Introduction from the Chair of the Governance, Remuneration and Nomination Committee
Dear shareholders,
On behalf of the Board, I am pleased to present Cash Converters’ 2023 Remuneration Report. During financial
year 2023, The Financial Sector Reform Act 2022 (“the Act”) received royal assent in December 2022 and
introduced a significant number of reforms in relation to Small Amount Credit Contracts (“SACC”), including new
restrictions on unsolicited communications, proscribed referrals to unregulated products and tighter income
requirements for credit eligibility. The executive team, with oversight from the Board, led a significant schedule
of work to ensure that the relevant legislative amendments were implemented effectively. Cash Converters
remains committed to operating in a compliant and transparent manner.
The response to these legislative changes required resource prioritisation, yet I am pleased to confirm that the
team continued to progress the strategic pillars of organic optimisation, inorganic expansion and customer and
product at the same time as implementing the legislative reforms. Delivery of the strategic pillars including the
successful acquisition of the remaining 75% interest in Cash Converters New Zealand master franchisor which
settled on 30 November 2022, the execution of a Sale and Purchase Agreement to acquire the largest franchisee
in the United Kingdom and the successful delivery of the new product pilot for Line of Credit (“LOC”). New
products, including the LOC will play an important role in the composition of the Company’s future loan book
and continue to enable Cash Converters to responsibility meet the needs of customers in addition to our offshore
initiatives. It is testament to the efforts of all Cash Converters’ employees that the team were able to effectively
respond to the regulatory changes whilst remaining focused on the delivery of key strategic initiatives to drive
ongoing value to our customers and shareholders.
Cash Converters acknowledge that the strong connection to our customers can only be achieved through a
workplace that attracts, encourages, and prioritises diversity and inclusion. During FY2023, we continued to
ensure that our annual, organisation wide review employee assessment process was applied consistently and
objectively to promote principles of transparency, merit and fairness when considering remuneration,
development, and career progression.
The Governance, Remuneration and Nomination Committee remain committed to ensuring that the
remuneration strategy attracts and retains high quality talent and aligns to the interests of all shareholders and
key stakeholders and to continue to lift the bar in this important area.
On behalf of the Board, I would like to thank our shareholders for their support and our Managing Director and
Executive team for their ongoing commitment and leadership.
Julie Elliott
Non-executive Director and chair of the Governance, Remuneration and Nomination Committee
30 June 2023
Cash Converters International Limited
25
Directors’ report
Remuneration report contents
1
2
3
4
5
6
7
1
Remuneration report overview ............................................................................................................... 26
People addressed and scope of the remuneration report ...................................................................... 26
Remuneration Governance ..................................................................................................................... 27
Remuneration Framework and link to Strategy ...................................................................................... 28
Performance and reward summary ......................................................................................................... 31
The link between performance and reward in FY2023 ........................................................................... 36
Statutory Tables and Supporting Disclosures .......................................................................................... 42
Remuneration report overview
This remuneration report forms part of the directors’ report for the year ended 30 June 2023 and has been
prepared in accordance with the Corporations Act 2001, applicable regulations and the Company’s policies
regarding Key Management Personnel (“KMP”) remuneration governance.
The remuneration report has been audited.
2
People addressed and scope of the remuneration report
KMP includes all directors and executives who have authority and responsibility for planning, directing and
controlling the activities of the Company. On that basis, the following roles / individuals are addressed in this
report:
Committee Membership
BIC1
ARC1 GRNC1
C
C
C
Name
Role
Non-Executive directors
Timothy Jugmans Chairman and Non-Executive Director
Lachlan Given
Julie Elliott
Robert Hines
Henry Shiner
Susan Thomas
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Executive directors
Sam Budiselik
Peter Cumins2
Managing Director
Executive Deputy Chairman
Executive key management personnel
Lisa Stedman
James Miles
Leslie Crockett
Jonty Gibbs3
Chief Operating Officer
Chief Information Officer
Chief Financial Officer (resigned 31/12/2022)
Chief Financial Officer
Appointed
01/04/2022
22/08/2014
14/04/2020
14/04/2020
01/07/2021
01/04/2022
18/12/2020
23/01/2017
07/09/2020
01/07/2020
02/06/2020
01/01/2023
1
ARC = Audit & Risk Committee, GRNC = Governance, Remuneration & Nomination Committee, BIC = Board Investment Committee,
C = Chair of Committee, = Member of Committee
2 Mr Cumins was first appointed as Managing Director from 26 April 1995 and was later appointed Executive Deputy Chairman from 23
January 2017
3 Mr Gibbs was appointed Interim Chief Financial Officer from 1 January 2023 and later appointed Chief Financial Officer from 1 April
2023
The following changes to KMP occurred during FY2023 and to the date of publication of this report:
• Mr Leslie Crockett resigned effective 31 December 2022
• Mr Jonty Gibbs was appointed Interim Chief Financial Officer from 1 January 2023 and later appointed
Chief Financial Officer from 1 April 2023
30 June 2023
Cash Converters International Limited
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Directors’ report
3
Remuneration Governance
The following describes how the Board, the Governance, Remuneration and Nomination Committee (“GRNC”)
and the Managing Director interact to set the remuneration structure and determine the remuneration
outcomes for the Group:
3.1
Board
The Board is responsible for the structure of remuneration for directors and KMP. The goal is to maximise the
effectiveness of remuneration in the creation of long-term shareholder value and align to the Company’s
strategic objectives and risk management framework.
3.2
Governance, Remuneration and Nomination Committee
The Governance, Remuneration and Nomination Committee is responsible for reviewing and setting strategy
incorporated in the remuneration framework, policies, delegations and practices on behalf of the Board. KMP
remuneration levels are reviewed annually by the Committee in line with the Company’s Remuneration Policy
and with reference to market movements. The Committee is responsible for making recommendations to the
Board on:
•
•
•
•
•
•
remuneration strategy to attract and retain talent to drive long term sustainable results;
recruitment, retention, and termination policies and procedures for KMP;
base salaries for KMP and Board and Committee fees for non-executive Directors;
short term incentives for KMP;
equity-based incentive remuneration plans; and
governance matters including delegations, disclosures, conflicts of interest and independence.
The Corporate Governance Statement and the GRNC Charter provide further information on the role of this
Committee. These documents and related policies and practices are available on the Company website at
https://www.cashconverters.com/governance.
The performance review of the Managing Director is undertaken by the Chairman of the Board, reviewed by the
GRNC, and approved by the Board.
3.3
Managing Director
The performance reviews of executive KMP and other direct reports are undertaken by the Managing Director,
reviewed by the GRNC and approved by the Board.
3.4
External Advisors
To inform the Board and the GRNC, and to assist with their decision-making process, additional information and
data is sought from management and remuneration consultants, as required. Independent external
remuneration consultants are endorsed by the GRNC, and approved by the Board.
30 June 2023
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Directors’ report
4
Remuneration Framework and link to Strategy
4.1
Executive key management personnel including Managing Director
The remuneration policies are designed to ensure that remuneration outcomes are aligned with the long-term
success of the Group and to also attract and retain talent to drive long term sustainable results and strategy.
Incentives are based on the achievement of sustained growth in earnings as well as relative shareholder return
while adhering to sound risk management and governance principles.
The remuneration strategy is underpinned by the following principles and remuneration structure in the table
below:
• align remuneration with customer and shareholder interests;
• support an appropriate risk culture and exemplary employee conduct;
• differentiate pay for behaviour and performance in line with our vision and strategy;
• provide market competitive and fair remuneration;
• remunerate fairly and in a manner that promotes the Company’s commitment to building a diverse and
inclusive workforce;
• recognise the role of critical and non-financial generating roles in long term value creation;
• enable recruitment and retention of talented employees; and
• be simple, flexible and transparent.
These measures provide a clear and strong correlation between performance and reward and align the interests
of executive KMP including the Managing Director with those of the Company’s shareholders as well across the
organisation. The overall remuneration structure for the year ended 30 June 2023 remains consistent with to
prior years and comprises:
Fixed Remuneration
Purpose
Attract and retain high quality
executives through market
competitive and fair
remuneration
Short-Term Incentive (STI)
Long-Term Incentive (LTI)
Ensure a portion of
remuneration is variable, at-risk
and linked to the delivery of
agreed plan targets for financial
and non-financial measures
that support strategic priorities
Align executive accountability and
remuneration with the long-term
interests of shareholders by
rewarding the delivery of sustained
Group performance over the long
term
Delivery
Base salary and superannuation
as per the Superannuation
Guarantee (Administration) Act
1992
Awarded in cash based on an
assessment of performance
over the preceding year
Awarded in performance share rights
which potentially vest after three
years, based on the following:
•
50% dependent on earnings per
share (“EPS”) compound annual
growth rate over a three-year
performance period; and
total
50%
on
dependent
shareholder
(“TSR”)
relative to Index over the same
three-year performance period
return
•
Alignment to performance
Set with reference to
comparable industry market
benchmarks as well as the size,
responsibilities, and complexity
of the role, and skills and
experience. Individual
performance impacts fixed
remuneration adjustments
Performance is assessed using a
scorecard comprising financial
and non-financial measures
linked to the key strategic
priorities
Performance is assessed against
EPS and TSR which are measures
aligned to shareholders (measured
over three years)
30 June 2023
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Directors’ report
Strategic objectives were articulated as part of the Chairman’s address and the Managing Director presentation
at the FY2022 shareholder Annual General Meeting. Regular market updates have been provided during the
financial year with progress reports, including the half-year report and full year results investor presentations,
aligned to the key objectives.
Financial Year 2023 Strategic Framework
Aligned to strategic intent, the remuneration structure ensures that if the Group under-performs on its earnings
and / or return targets, no STI will be payable to executive key management personnel. Under-performance over
the longer-term may also result in no vesting of performance rights.
Eligibility to participate in the STI and/or LTI is at the recommendation of the GRNC and approval of the Board.
The participation level in terms of percentage of fixed remuneration to set STI target awards and the grant of
performance rights which may vest over the three-year performance period is determined annually as part of
the remuneration review process. The assessment is based on benchmarked relevant market practice in similar
companies with similar characteristics.
Remuneration for all executives is reviewed at least annually. There is no guaranteed increase in any executive’s
employment contract.
4.2
Executive Director: Executive Deputy Chairman Arrangements
The remuneration package for 2023 remained consistent in principle to the arrangements in place at the end of
the prior year.
Superannuation as per the Superannuation Guarantee (Administration) Act 1992 remains payable and consistent
with prior years, the Executive Deputy Chairman does not participate in any Incentive Plan.
30 June 2023
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Directors’ report
4.3
Non-Executive Director Arrangements
The Remuneration Policy is designed to ensure that remuneration outcomes enable the Company to attract,
retain and motivate the high calibre of Non-Executive Directors required for it to meet its objectives and in
accordance with the Boards skills matrix.
A Non-Executive Director is not entitled to receive performance-based remuneration. They may be entitled to
fees or other amounts, as the Board determines, where they perform duties outside the scope of the ordinary
duties of a director. No such payments have been made in 2023. They may also be reimbursed for out-of-pocket
expenses incurred.
4.4
Securities Trading Policy
The Securities Trading Policy imposes trading restrictions on all directors, officers and employees and their
associates.
All directors, officers and employees of the Company are prohibited from:
•
•
•
dealing in any securities where the person dealing in the securities has inside information in relation to
those securities;
passing on inside information to others who may deal in securities; and
applying to participate in an Employee Share Plan while in possession of inside information.
Additionally, the following blackout periods apply to KMP and their associates who are prohibited from trading
in the Company’s securities:
•
•
•
from 1 January each year to the opening of market the business day following the release of the
Company’s half yearly accounts to the ASX;
from 1 July each year to the opening of market the business day following the release of the Company’s
preliminary annual accounts to the ASX; and
any other period determined by the Board from time to time to be a blackout period.
KMP are prohibited from entering into contracts to hedge their exposure to any securities held in the Company.
The Company’s Securities Trading Policy is available at https://www.cashconverters.com/governance.
30 June 2023
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Directors’ report
5
Performance and reward summary
5.1
Remuneration policy and link to performance
As outlined above, in setting the Company’s remuneration strategy, the GRNC makes recommendations which
demonstrate a clear and strong correlation between performance and reward and align the interests of
executive KMP with those of the Company’s shareholders.
The following table shows the statutory key performance indicators of the Group over the last five years:
Revenue from continuing operations
Net (loss) / profit before tax from
continuing operations
Net (loss) / profit after tax
- continuing operations
- discontinued operations
(Loss) / profit after tax
Share price
- beginning of year
- end of year
Change in share price
Fully franked dividend
- interim
- final dividend
Change in Shareholder Wealth
- share price change + dividend
(Losses) / earnings per share from
continuing and discontinued operations
- basic
Year ended 30 June
2019
$’000
281,565
2020
$’000
262,021
2021
$’000
201,346
2022
$’000
245,937
2023
$’000
302,697
(2,366)
(22,416)
21,454
15,385
(91,019)
(1,692)
-
(1,692)
Cents
31.0
16.0
(15.0)
(16,872)
-
(16,872)
Cents
16.0
17.5
1.5
-
-
-
-
(15.0)
1.5
20,704
-
20,704
Cents
17.5
22.0
4.5
1.0
1.0
6.5
11,177
-
11,177
Cents
22.0
23.0
1.0
1.0
1.0
3.0
(97,155)
-
(97,155)
Cents
23.0
22.5
(0.5)
1.0
1.0
1.5
(0.27)
(2.74)
3.35
1.80
(15.54)
The Board effectively links performance and reward through the approval of an operating profit after tax target
at the start of each measurement period. The FY2023 STI target was approved before the commencement of
the 2023 financial year and is measured at 30 June 2023 on the release of the FY2023 results.
The operating profit after tax for the year is $20.104 million (2022 $19.014 million) – see note 6.1 of the
remuneration report below.
The FY2021 LTI grant targets were approved in FY2021 with a measurement period of 1 July 2020 to 30 June
2023. Vesting of these performance rights is subject to meeting the approved hurdles and the release of the
FY2023 results. The FY2023 grant of performance rights is subject to performance conditions measured over a
performance period of 3 years commencing 1 July 2022 and ending on 30 June 2025. The financial targets act as
performance conditions in the assessment of variable remuneration under the plans detailed below.
30 June 2023
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Directors’ report
5.2
FY2023 Short Term Incentive (“STI”) Plan
A description of the STI structure applicable for FY2023 is set out below:
Purpose
Ensure a portion of remuneration is variable, at-risk and linked to the
delivery of agreed plan targets for financial and non-financial measures
that support strategic priorities.
Measurement period
The financial year of the company (1 July 2022 – 30 June 2023)
Opportunity
Managing Director
•
100% of fixed remuneration
Other Executive KMP
•
50% of fixed remuneration
Gate
Assessment gateway based on meeting or exceeding the operating
earnings threshold approved by the Board
Award, settlement and deferral
Awarded in cash on completion of the external audit, approval by the
GRNC and Board and subsequent release of the Annual Report.
Board Discretion
Board exercises discretion in setting the operating earnings threshold.
Unless the Board determines otherwise, if a participant’s employment
with the Group is terminated during the Performance Period as a ‘good
leaver’, they will be entitled to receive a pro-rata amount of their STI.
in
If a participant’s employment with the Group
circumstances in which they are not considered a ‘good leaver’ their STI
will immediately lapse.
is terminated
Participants are measured against specified behavioural competencies
during the annual performance review.
If a change of control event occurs with respect to the Company, the
Board may determine, in its discretion, the manner in which all
incentives will be dealt with.
Value alignment
Corporate actions
Malus and clawback
The Board may determine at its discretion to apply clawback and malus
in some situations depending on the terms of the relevant award.
STI metrics and weightings
STI payments are not guaranteed and are linked to the achievement of a
Board approved financial target, shared and individual performance
metrics.
In the financial year 2023 the weightings applied were 40% to shared
metrics and 60% to individual metrics.
30 June 2023
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Directors’ report
5.3
FY2023 Long Term Incentive (“LTI”) Plan
A description of the LTI structure applicable for FY2023 is set out below:
The Cash Converters Equity Incentive Plan (“Plan”) is available for review at Cash Converters Rights Plan Rules
(https://www.cashconverters.com/wp-content/uploads/2021/06/Cash-Converters-Rights-Plan-Rules.pdf). The
Plan was approved by shareholders at the Annual General Meeting held on 26 October 2021.
The Plan provides eligible participants with an incentive plan that recognises ongoing contribution to the
achievement by the Company of its strategic goals, and to provide a means of attracting and retaining skilled
and experienced employees. Participation in the LTI Plan is at the discretion of the Board.
Subject to the achievement of performance conditions, participants may be entitled to be granted performance
rights and / or indeterminate rights as approved by the Board.
LTI payments are delivered in performance rights which vest into shares on the achievement of certain
performance criteria or, indeterminate rights, where the Board, in their absolute and unfettered discretion,
make a cash payment equivalent to the number of vested indeterminate rights multiplied by the then value of
the Company’s share price.
The LTI is designed to align the interests of shareholders and executive KMP by motivating and rewarding
participants to achieve compound annual earnings growth and produce strong shareholder returns over the
medium- to long-term.
The LTI right grant awards made to eligible participants in October 2022 were offered across two equal tranches
and based on performance hurdles in which each hurdle operates independently and applies to 50% of the
potential LTI allocation. The Board believes this structure provides a balance between alignment of shareholder
returns whilst mitigating the risk of excessive focus on share price performance.
Of the total number of performance rights granted:
•
•
50% are subject to a Relative Total Shareholder Return (“rTSR Rights”) measure, assessing the
Company’s performance relative to constituents of the S&P/ASX Small Ordinaries index excluding
materials, utilities, and REITs over the Performance Period; and
50% are subject to a normalised earnings per share (“EPS Rights”) measure.
The FY2023 grant of performance rights is subject to performance conditions measured over a performance
period of 3 years commencing 1 July 2022 and ending on 30 June 2025. Calculation of the achievement against
the performance conditions will be determined by the Board of the Company in its absolute discretion at the
conclusion of the performance period, having regard to any matters that it considers relevant. In line with the
Plan rules, unless otherwise determined by the Board, the performance rights will lapse, where the vesting
conditions applicable to the award cannot be satisfied as at the end of the performance period. On this basis the
expiry date for the performance rights is 30 September 2025. The number of performance rights that vest will
depend on the level of performance achieved.
The Board also retains overall discretion to determine whether vesting of performance rights is appropriate
considering, a number of other factors it considers relevant including company performance from the
perspective of Shareholders.
30 June 2023
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Directors’ report
Relative Total Shareholder Return
Relative Total Shareholder Return (“rTSR”) calculates the return shareholders would earn if they held a notional
number of shares over a period and measures the change in the Company’s share price together with the value
of dividends during the period, assuming that all those dividends are re-invested into new shares.
For any rights subject to the rTSR measure to vest, a threshold level of performance must be achieved. The
percentage of rTSR rights that vest, if any, will be determined by the Board as follows:
Company’s TSR relative to
constituents of the S&P/ASX
Small Ordinaries Index,
excluding materials, utilities,
and REITs*
Less than 50th percentile
At 50th percentile
Between 50th percentile and
100th percentile
At 100th percentile
Performance Level
Percentage of rTSR Rights
5 years
Post-tax discount rate applied to cash
flows
Personal Finance*
17%
16%
(16%)
(9%)
(10%)
1%
(10%) to 5%
1% to 3%
2.5%
11.40%
Store Operations*
13%
9%
(1%)
2%
4%
2%
3% to 4%
2% to 3%
2.5%
10.30%
New Zealand**
4%
(1%)
9%
(4%)
6%
4% to 7%
2.5%
11.50%
* The Personal Finance and Store Operations segments were tested for impairment at 31 December 2022 using
cashflow forecasts reflective of the assumptions in this table. The resulting impairment to plant and equipment,
right-of-use assets, other intangible assets and goodwill recognised at 31 December 2022 was reported as an
impairment loss of $117.153 million in the period to 31 December 2022 (30 June 2022: $11.196 million).
** The New Zealand segment has been tested for impairment at 30 June 2023 using cashflow forecasts reflective
of the assumptions in the table.
30 June 2023
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Notes to the financial statements
For the year ended 30 June 2022, the key assumptions, for budgeted revenue and expense growth rates are
included below for comparison. No comparatives are available for New Zealand.
Assumption
FY2023 budget revenue growth
FY2023 budget expense growth
FY2024 forecast revenue growth
FY2024 forecast expense growth
Revenue growth rate beyond year 2
Expense growth rate beyond year 2
Terminal growth rate > 5 years
Post-tax discount rate applied to cash flows
Personal Finance
16%
8%
4%
7%
3% to 5%
3% to 5%
2.5%
10.80%
5.d)
Impairment testing of individual Store Operations CGUs
Store Operations
13%
8%
4%
2%
3%
2%
2.5%
10.90%
A test for impairment of the carrying value of assets can be triggered by a change in several indicators, both
internal and external. During the reporting period, there were indicators of impairment due to legislative
changes as a result of the passing of the Act. Where indicators of impairment exist, it remains a requirement to
perform an impairment test of the carrying amount of the individual store CGUs. Goodwill is not allocated to the
individual store CGUs as it is monitored by management at the Store Operations operating segment.
An impairment loss is recognised for the amount by which the individual store CGU’s carrying amount exceeds
its recoverable amount. Recoverable amounts for individual store CGUs are calculated based on a value in use
model which uses cash flow projections based on budgets approved by the Board and updated by management
to reflect current business performance, covering a five-year period. Cash-flows beyond the five-year period are
calculated based on a terminal growth rate under standard valuation principles.
Key assumptions are based on a combination of past experience for mature products and external sources
(market data) for less mature products and economic metrics such as interest rates.
Working capital requirements are factored into the modelling based on historic requirements for each CGU and
vary in line with earnings growth. Capital investment, required to run the business (i.e., replacement and non-
expansionary capital expenditure) has been included based on forecast amounts for the next financial year and
incremental growth in subsequent years consistent with revenue trends.
Each individual store CGU carrying amount primarily comprises right-of-use assets, store fixtures and fittings as
well as other intangibles. Corporate assets such as software are allocated to the individual stores on a
proportionate basis and also tested for impairment.
Impairment losses recognised
A number of individual store CGUs were impaired to their recoverable amount at 30 June 2023 and an
impairment expense of $6.672 million (30 June 2022: $11.196 million) was recognised. The assets were impaired
to their recoverable amount based on the value in use of the CGU to which they relate.
The impairment at individual store level, which is not an impairment of goodwill, may reverse in future
accounting periods if the recoverable amount increases above the carrying value of the asset. The increased
amount cannot exceed the carrying value that would have been determined, net of depreciation or
amortisation, had no impairment loss been recognised for the asset in prior years.
Previously impaired assets (excluding goodwill) are reviewed for possible reversal of previous impairment at
each reporting date. Impairment reversals cannot exceed the carrying amount that would have been determined
(net of depreciation) had no impairment loss been recognised for the asset or cash generating units (“CGUs”).
30 June 2023
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Notes to the financial statements
5.e)
Impairment sensitivity
The Group is required to make significant estimates and apply significant judgments in determining whether the
carrying amount of assets and/or CGUs have any indication of impairment. Such estimates and judgments are
subject to change as a result of changing economic and operational conditions. Actual cash flows may therefore
differ from forecasts and could result in changes in the recognition of impairment charges in future periods.
5.f)
Impairment testing of goodwill
As reported in the 31 December 2022 half-year report impairment modelling for each CGU or group of CGUs has
been prepared separately based on a value in use model which uses cash flow projections based on budgets
approved by the Board and updated by management to reflect current business performance, covering a five-
year period. Cash flows beyond the five-year period are estimated using industry growth rates and a terminal
value calculated based on a terminal growth rate under standard valuation principles.
Key assumptions are based on a combination of past experience for mature products and external sources
(market data) for less mature products and economic metrics such as interest rates.
Working capital requirements are factored into the modelling based on historic requirements for each CGU and
vary in line with earnings growth. Capital investment, required to run the business (i.e., replacement and non-
expansionary capital expenditure) has been included based on forecasted amounts for the next financial year
and incremental growth in subsequent years consistent with revenue trends.
Refer to note 8.d for further information supporting the changes in the goodwill balances.
6
Income tax
6.a)
Income tax expense
Current income tax expense
Current year
Adjustment for prior years
Deferred income tax expense
Temporary differences
Adjustment for prior years
Deferred tax asset on recognition of carry forward UK losses
Income tax expense reported in income statement
30-Jun
2023
$'000
30-Jun
2022
$'000
8,677
688
(2,798)
(431)
-
6,136
9,705
(818)
(5,873)
1,295
(101)
4,208
30 June 2023
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Notes to the financial statements
6.b)
Numerical reconciliation of income tax expense to prima facie tax payable
Tax reconciliation
(Loss) / profit before tax from continuing operations
Income tax at the statutory rate of 30% (2022: 30%)
Adjustments relating to prior years
Income tax rate differential
Other adjustments
Tax effect of share-based payment expense
Tax effect of goodwill impairment expense
Deferred tax asset on recognition of carry forward UK losses
Income tax expense on (loss) / profit before tax
30-Jun
2023
$'000
30-Jun
2022
$'000
(91,019)
15,385
(27,306)
257
29
53
(41)
33,144
-
6,136
4,616
477
(315)
(484)
15
-
(101)
4,208
6.c)
Tax losses
A deferred tax asset in respect of carry forward losses of $8.607 million (2022: $8.136 million) has been
recognised in relation to the Group’s UK operations. Profit has been achieved in the last three years with the
FY2023 year reflecting utilisation of the carry forward losses because of taxable profits arising. Ongoing taxable
profit forecasts have supported recognising in full the deferred tax asset (“DTA”) that arises from unused tax
losses from previous years.
Carry forward losses of $899 thousand (2022: nil) have been recognised in relation to losses in the Group’s New
Zealand operations during the current year.
Refer to note 26.e for further information supporting the recognition of these losses.
6.d)
Uncertainty over income tax treatments
There were no adjustments to the amounts recognised in the financial report as a result of applying IFRIC 23
Uncertainty over Income Tax Treatments.
The Interpretation requires the Group to:
• determine whether uncertain tax positions are assessed separately or as a Group; and
• assess whether it is probable that a tax authority will accept an uncertain tax treatment used, or proposed
to be used, by an entity in its income tax filings:
o if yes, the Group should determine its accounting tax position consistently with the tax treatment used
or planned to be used in its income tax filings.
o if no, the Group should reflect the effect of uncertainty in determining its accounting tax position using
either the most likely amount or the expected value method.
6.e)
Relevance of tax consolidation to the Group
The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group with
effect from 1 July 2003 and are therefore taxed as a single entity from that date. The head entity within the tax-
consolidated group is Cash Converters International Limited. The members of the tax-consolidated group are
identified in note 16.
30 June 2023
Cash Converters International Limited
69
Notes to the financial statements
6.f)
Nature of tax funding arrangements and tax sharing agreements
Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax sharing
agreement with the head entity. Under the terms of the tax funding arrangement, Cash Converters International
Limited and each of the entities in the tax-consolidated group has agreed to pay a tax equivalent payment to or
from the head entity, based on the current tax liability or current tax asset of the entity. Such amounts are
reflected in amounts receivable from or payable to other entities in the tax-consolidated group.
The tax sharing agreement entered into between members of the tax-consolidated group provides for the
determination of the allocation of income tax liabilities between the entities should the head entity default on
its tax payment obligation. No amounts have been recognised in the financial statements in respect of this
agreement as payment of any amounts under the tax sharing agreement is considered remote.
See note 8.f for deferred tax balances.
See note 26.e for the accounting policy.
30 June 2023
Cash Converters International Limited
70
Notes to the financial statements
7
Financial assets and financial liabilities
Financial assets
Cash and cash equivalents
Trade and other receivables
Loan receivables
Financial liabilities
Trade and other payables
Borrowings
7.a)
Cash and cash equivalents
Cash on hand
Cash at bank
30-Jun
2023
$’000
30-Jun
2022
$’000
71,565
10,219
224,729
306,513
58,085
5,332
175,653
239,070
18,984
136,991
155,975
15,398
68,365
83,763
30-Jun
2023
$’000
30-Jun
2022
$’000
3,153
2,959
68,412
55,126
71,565
58,085
Cash at bank includes restricted cash of $6.081 million (2022: $9.262 million) that is held in accounts controlled
by the CCPF Receivables Trust No 1 that was established to operate the Company’s securitisation facility with
Fortress Investment Group. The facility prescribes that cash deposited in this account can only be used to fund
new principal advances. Surplus funds at the end of the period are redistributed in keeping with the terms of
the securitisation facility. Cash at bank includes a further $6.220 million (2022: $6.220 million) on deposit as
security for banking facilities.
See note 26.j for the accounting policy
30 June 2023
Cash Converters International Limited
71
Notes to the financial statements
7.b)
Trade and other receivables
Current
Trade receivables
Allowance for expected credit losses
Total trade receivables (net)
Vendor finance loans
Other receivables
Total trade receivables
Non-current
Loan to external parties (net of provision)
Other receivables
Total trade and other receivables
30-Jun
2023
$’000
30-Jun
2022
$’000
1,245
(485)
760
122
2,688
3,570
1,333
(308)
1,025
275
2,262
3,562
4,823
1,826
6,649
-
1,770
1,770
Trade receivables include weekly franchise fees and over the counter fees. Regardless of whether the collection
of the debtor is doubtful, an allowance for expected credit losses is recognised. The average credit period on
sales is 30 days. No interest is charged for the first 30 days from the date of the invoice. Thereafter, interest may
be charged on the outstanding balance.
Vendor finance loans are loans made to purchasers of the Group’s UK corporate stores during the year ended
30 June 2017 as part of the purchase agreement. The loans had various initial terms of up to 6 years, and bear
interest at rates between nil and 8%. The receivables are held at amortised cost.
Loan to external parties includes a commercial loan advanced to Cash Converters Espana, S.L (Spain master
franchisor) in April 2023 with a maturity date in FY2025. Interest is charged monthly at a rate of 15% per annum,
to be paid in a lump sum at the maturity date. An allowance for expected credit losses of $254 thousand has
been recognised in relation to this loan.
Other receivables include rental bonds, development agent fees outstanding, sub-master license sales, Mon-E
fees, financial commission, and instalment credit loans.
As at 30 June the ageing analysis of trade receivables was as follows:
0 to 30 days
31 to 60 days past due not impaired
61 to 90 days past due not impaired
90+ days past due not impaired
Stage 3 expected credit loss
Balance at end of year
30-Jun
2023
$’000
30-Jun
2022
$’000
613
48
7
92
485
1,245
535
36
35
419
308
1,333
30 June 2023
Cash Converters International Limited
72
Notes to the financial statements
Allowance for expected credit losses
As at 30 June 2023, trade receivables of $485 thousand (2022: $308 thousand) were considered to be in Stage
3 of expected credit losses as described in the accounting policy. Movements in the allowance for expected
credit losses of trade receivables were as follows:
Balance at beginning of year
Expected credit losses recognised on receivables
Foreign currency exchange differences
Balance at end of year
See note 26.k for the accounting policy.
7.c)
Loan receivables at amortised cost
30-Jun
2023
$’000
30-Jun
2022
$’000
308
156
21
485
99
213
(4)
308
30-June-2023
$’000
$’000
$’000
$’000
$’000
Personal
Vehicle
Store
New
Total
Finance Financing Operations
Zealand
Current
Outstanding balance
Allowance for expected credit losses
Net
Non-current
Outstanding balance
Allowance for expected credit losses
Net
159,093
(25,965)
133,128
31,877
(6,094)
25,783
17,628
(1,839)
15,789
10,497 219,095
(37,026)
(3,128)
7,369 182,069
19,235
(2,985)
16,250
31,037
(5,928)
25,109
-
-
-
1,988
(687)
1,301
52,260
(9,600)
42,660
Personal
Vehicle
Store
New
Total
Finance Financing Operations
Zealand
30-June-2022
$’000
$’000
$’000
$’000
$’000
Current
Outstanding balance
Allowance for expected credit losses
Net
Non-current
Outstanding balance
Allowance for expected credit losses
Net
133,672
(23,088)
110,584
22,767
(5,377)
17,390
17,755
(1,673)
16,082
15,828
(2,575)
13,253
23,928
(5,584)
18,344
-
-
-
- 174,194
-
(30,138)
- 144,056
-
-
-
39,756
(8,159)
31,597
30 June 2023
Cash Converters International Limited
73
Notes to the financial statements
The credit period provided in relation to personal short-term unsecured loans varies from 7 days to 36 months.
Interest is charged on these loans at a fixed rate which, for pawnbroking loans, varies dependent on the state of
origin. An expected credit loss allowance has been recognised for estimated unrecoverable amounts arising from
loans already issued, which has been determined by reference to past default experience. Before accepting any
new customers, the Group uses an internally developed scoring system, which uses available credit data, to
assess the potential customer’s credit quality and define credit limits by customer. There is no concentration of
credit risk within the personal loan book.
Vehicle finance loans are secured loans advanced for financing the purchase of vehicles. The average remaining
term of these loans is 2.9 years (2022: 2.4 years) and the average interest rate is 24.1% (2022: 24.4%).
As at 30 June the ageing analysis of Personal Finance and Store Operations receivables was as follows:
0 to 30 days
31 to 60 days past due not impaired
61 to 90 days past due not impaired
90 + days past due not impaired
Loan receivables carrying value
Allowance for expected credit loss
Gross carrying value
As at 30 June the ageing analysis of Vehicle Financing loan receivables was as follows:
0 to 30 days
31 to 60 days past due not impaired
61 to 90 days past due not impaired
90 + days past due not impaired
Loan receivables carrying value
Allowance for expected credit loss
Gross carrying value
30-Jun
2023
$’000
30-Jun
2022
$’000
148,867
8,391
4,866
3,043
165,167
30,789
195,956
127,724
6,961
3,571
1,663
139,919
27,336
167,255
30-Jun
2023
$’000
34,981
3,433
2,404
10,074
50,892
12,022
62,914
30-Jun
2022
$’000
24,532
2,208
1,289
7,705
35,734
10,961
46,695
30 June 2023
Cash Converters International Limited
74
Notes to the financial statements
As at 30 June the ageing analysis of New Zealand loan receivables was as follows:
0 to 30 days
31 to 60 days past due not impaired
61 to 90 days past due not impaired
90 + days past due not impaired
Loan receivables carrying value
Allowance for expected credit loss
Gross carrying value
30-Jun
2023
$’000
6,920
846
640
264
8,670
3,815
12,485
30-Jun
2022
$’000
-
-
-
-
-
-
-
Allowance for expected credit losses (“ECL”)
In determining the recoverability of a Personal Finance loan, the Group considers any change in the credit quality
of the receivable from the date credit was initially granted up to the reporting date. The concentration of credit
risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there
is no further credit loss allowance required in excess of the loss allowance.
The following table explains changes in the loss allowance between the beginning and end of the year:
Personal Finance and Store Operations receivables
Loss allowance
Balance at 1 July 2022
Movements with P&L impact
Transfers:
Transfers from Stage 1 to Stage 2
Transfers from Stage 1 to Stage 3
Transfers from Stage 2 to Stage 1
Transfers from Stage 2 to Stage 3
Transfers from Stage 3 to Stage 1
Transfers from Stage 3 to Stage 2
New financial assets originated
Changes in PDs/LGDs/EADs
Changes to model assumptions and methodologies
Written off and settled loans
Total net change during the period
Stage 1
12 month
ECL
Stage 2
Lifetime
ECL
Stage 3
Lifetime
ECL
Total
$’000
$’000
$’000
$’000
6,873
7,980
12,483
27,336
(689)
(772)
107
-
56
-
5,304
16
535
(4,262)
295
689
-
(107)
(1,345)
-
710
6,886
(1,103)
1,320
(5,614)
1,436
-
772
-
1,345
(56)
(710)
8,373
(1,596)
2,156
(8,562)
1,722
-
-
-
-
-
-
20,563
(2,683)
4,011
(18,438)
3,453
Balance at 30 June 2023
7,168
9,416
14,205
30,789
30 June 2023
Cash Converters International Limited
75
Notes to the financial statements
The following table further explains changes in the gross carrying amount of the loans and receivables to help
explain their significance to the changes in the loss allowance:
Personal Finance and Store Operations receivables
Gross carrying amount
Balance at 1 July 2022
Movements with P&L impact
Transfers:
Transfers from Stage 1 to Stage 2
Transfers from Stage 1 to Stage 3
Transfers from Stage 2 to Stage 1
Transfers from Stage 2 to Stage 3
Transfers from Stage 3 to Stage 1
Transfers from Stage 3 to Stage 2
New financial assets originated
Changes in outstanding balances
Written off and settled loans
Total net change during the period
Stage 1
12 month
ECL
Stage 2
Lifetime
ECL
Stage 3
Lifetime
ECL
Total
$’000
$’000
$’000
$’000
111,969
27,134
28,152
167,255
(10,515)
(9,596)
616
-
221
-
109,792
(8,535)
(81,490)
493
10,515
-
(616)
(5,160)
-
2,699
33,288
(9,043)
(18,948)
12,735
-
9,596
-
5,160
(221)
(2,699)
25,540
(3,728)
(18,175)
15,473
-
-
-
-
-
-
168,620
(21,306)
(118,613)
28,701
Balance at 30 June 2023
112,462
39,869
43,625
195,956
In determining the recoverability of a Vehicle Financing loan, the Group considers any change in the credit
quality of the receivable from the date credit was initially granted up to the reporting date. The Group has made
an allowance based on known historical losses and a reasonable estimation of expected future losses. As these
loans are secured by the underlying vehicle financed, the total loss will be reduced by the recoverable amount.
Accordingly, the directors believe that there is no further credit loss allowance required in excess of the loss
allowance for expected credit losses.
30 June 2023
Cash Converters International Limited
76
Notes to the financial statements
The following table explains changes in the loss allowance between the beginning and end of the year:
Vehicle Financing loans receivables
Loss allowance
Balance at 1 July 2022
Movements with P&L impact
Transfers:
Transfers from Stage 1 to Stage 2
Transfers from Stage 1 to Stage 3
Transfers from Stage 2 to Stage 1
Transfers from Stage 2 to Stage 3
Transfers from Stage 3 to Stage 1
Transfers from Stage 3 to Stage 2
New financial assets originated
Changes in PDs/LGDs/EADs
Changes to model assumptions and methodologies
Written off and settled loans
Total net change during the period
Stage 1
12 month
ECL
Stage 2
Lifetime
ECL
Stage 3
Lifetime
ECL
Total
$’000
$’000
$’000
$’000
1,956
1,978
7,027
10,961
(485)
(299)
114
-
53
-
1,191
(1,042)
382
(264)
(350)
485
-
(114)
(1,000)
-
294
1,530
(42)
439
(430)
1,162
-
299
-
1,000
(53)
(294)
972
(471)
1,316
(2,520)
249
-
-
-
-
-
-
3,693
(1,555)
2,137
(3,214)
1,061
Balance at 30 June 2023
1,606
3,140
7,276
12,022
The following table further explains changes in the gross carrying amount of the loans and receivables to help
explain their significance to the changes in the provision as discussed above:
Vehicle Financing loans receivables
Gross carrying amount
Balance at 1 July 2022
Movements with P&L impact
Transfers:
Transfers from Stage 1 to Stage 2
Transfers from Stage 1 to Stage 3
Transfers from Stage 2 to Stage 1
Transfers from Stage 2 to Stage 3
Transfers from Stage 3 to Stage 1
Transfers from Stage 3 to Stage 2
New financial assets originated
Changes in outstanding balances
Written off and settled loans
Total net change during the period
Stage 1
12 month
ECL
Stage 2
Lifetime
ECL
Stage 3
Lifetime
ECL
Total
$’000
$’000
$’000
$’000
31,748
4,820
10,127
46,695
(6,602)
(3,004)
316
-
80
-
27,116
(5,004)
(6,265)
6,637
6,602
-
(316)
(2,306)
-
439
5,852
(2,002)
(1,124)
7,145
-
3,004
-
2,306
(80)
(439)
2,378
(1,137)
(3,595)
2,437
-
-
-
-
-
-
35,346
(8,143)
(10,984)
16,219
Balance at 30 June 2023
38,385
11,965
12,564
62,914
30 June 2023
Cash Converters International Limited
77
Notes to the financial statements
In determining the recoverability of the New Zealand loan products, the Group considers any change in the credit
quality of the receivable from the date credit was initially granted up to the reporting date. The concentration
of credit risk is limited due to the customer base being large and unrelated. Accordingly, the directors believe
that there is no further credit loss allowance required in excess of the loss allowance.
The following table explains changes in the loss allowance between the beginning and end of the year:
New Zealand loan receivables
Loss allowance
Balance at 1 July 2022
Movements with P&L impact
Transfers:
Transfers from Stage 1 to Stage 2
Transfers from Stage 1 to Stage 3
Transfers from Stage 2 to Stage 1
Transfers from Stage 2 to Stage 3
Transfers from Stage 3 to Stage 1
Transfers from Stage 3 to Stage 2
Financial assets originated from business combination
New financial assets originated
Changes in PDs/LGDs/EADs
Changes to model assumptions and methodologies
Written off and settled loans
Total net change during the period
Stage 1
12 month
ECL
Stage 2
Lifetime
ECL
Stage 3
Lifetime
ECL
Total
$’000
$’000
$’000
$’000
-
-
-
-
(317)
(21)
1
-
-
-
1,641
1,209
(396)
10
(692)
1,435
317
-
(1)
(133)
-
12
1,516
1,291
264
64
(1,229)
2,101
-
21
-
133
-
(12)
141
37
63
10
(114)
279
-
-
-
-
-
-
3,298
2,537
(69)
84
(2,035)
3,815
Balance at 30 June 2023
1,435
2,101
279
3,815
30 June 2023
Cash Converters International Limited
78
Notes to the financial statements
The following table further explains changes in the gross carrying amount of the loans and receivables to help
explain their significance to the changes in the loss allowance:
New Zealand loan receivables
Gross carrying amount
Balance at 1 July 2022
Movements with P&L impact
Transfers:
Transfers from Stage 1 to Stage 2
Transfers from Stage 1 to Stage 3
Transfers from Stage 2 to Stage 1
Transfers from Stage 2 to Stage 3
Transfers from Stage 3 to Stage 1
Transfers from Stage 3 to Stage 2
Financial assets originated from business combination
New financial assets originated
Changes in outstanding balances
Written off and settled loans
Total net change during the period
Stage 1
12 month
ECL
Stage 2
Lifetime
ECL
Stage 3
Lifetime
ECL
Total
$’000
$’000
$’000
$’000
-
-
-
-
(1,583)
(99)
5
-
-
-
9,167
7,361
(1,044)
(5,292)
8,515
1,583
-
(5)
(221)
-
20
2,633
1,989
(548)
(1,855)
3,596
-
99
-
221
-
(20)
200
35
(20)
(141)
374
-
-
-
-
-
-
12,000
9,385
(1,612)
(7,288)
12,485
Balance at 30 June 2023
8,515
3,596
374
12,485
Changes in the loss allowance between the beginning and end of the year are attributable to the following items:
• Transfers to/(from) stages: movements due to transfers of credit exposures between Stage 1, Stage 2 and
Stage 3.
• New financial assets originated: movements in credit exposures and provisions for impairment due to new
financial assets originated.
• Changes in PDs/LGDs/EADs: movements due to changes in probability of default, loss given default and
exposure at default. Expected loss rates are based on payment profiles, age and expected lifetime of the
receivables, changes in underlying credit quality and historic loss experience.
• Changes to model assumptions and methodologies: movements in provisions for impairment due to
adjustments reflecting forward-looking macro-economic information or other assumptions.
• Written-off and settled loans: derecognition of credit exposures and provisions for impairment upon write-
off or repayment of receivables.
Accounting policy
Loan receivables that have fixed or determinable payments that are not quoted in an active market are classified
as loan receivables and are measured at amortised cost using the effective interest method including transaction
costs, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-
term receivables when the effect of discounting is immaterial.
30 June 2023
Cash Converters International Limited
79
Notes to the financial statements
Judgement – impairment of financial assets
Under AASB 9 Financial Instruments, a three-stage approach is applied to measuring ECL based on credit
migration between the stages as follows:
• Stage 1
At initial recognition, a provision equivalent to 12 months ECL is recognised.
• Stage 2
Where there has been a significant increase in credit risk (“SICR”) since initial recognition, a provision
equivalent to full lifetime ECL is required.
• Stage 3
Lifetime ECL is recognised for loans where there is objective evidence of impairment.
ECL are probability weighted and determined by evaluating a range of possible outcomes, taking into account
the time value of money, past events, current conditions and forecasts of future economic conditions.
Probability of default
To measure the ECLs, loan receivables have been grouped based on shared credit risk characteristics and the
days past due. The expected loss rates are based on the payment profiles of loan receivables over a period prior
to 1 July 2023 and the corresponding historical credit losses experienced within this period. Default is defined
as 90 days past due. For personal loans, the days past due measure used to calculate probability of default is
based on days since last missed repayment and for vehicle finance loans, the days past due measure used to
calculate probability of default is based on contractual repayment arrears. The default definitions align with
definitions used for internal credit risk management purposes and reflect the unique customer repayment
behaviour, loan management and collections strategies applied to the different loan products.
During the period, the specific provision for accounts in a formal hardship arrangement was discontinued as the
underlying expected credit loss model adequately addresses the risk within this cohort of loans. In FY2022 the
specific hardship provision for Personal Finance loan receivables was $3.098 million and for Vehicle Financing
loan receivables it was $0.504 million.
30 June 2023
Cash Converters International Limited
80
Notes to the financial statements
Macro-economic scenarios
The assessment of SICR and the calculation of ECL both incorporate forward-looking information. The Group has
performed historical analysis to identify key economic variables impacting credit risk and expected credit losses
for Personal Finance and Vehicle Financing Loan receivables. ECLs are a probability-weighted estimate of credit
losses over the expected life of the financial instrument.
In compliance with AASB 9 and to account for additional risk, the ECL model is adjusted to reflect forward-looking
macro-economic information. Professional judgement is exercised in applying macro-economic adjustments. An
assessment was undertaken to determine the most relevant and reliable economic indicator on which to base a
forward-looking assessment of ECL.
Unemployment rates were chosen as key indicators of impairment levels for the portfolios. Using publicly
available forecasts for unemployment rates over the next year, alternate scenarios, outlined below, were
determined. Cost of living pressures were also a consideration.
The outcome of this estimate is an additional $2.402 million (2022: additional $1.850 million) provision for
personal loan receivables, an additional $0.278 million (2022: nil) provision for New Zealand loan receivables
and an additional $0.935 million (2022: $0.670 million) provision for Vehicle Financing loan receivables.
The table below provides a summary of the unemployment rate forecasts used in the baseline, upside and
downside scenarios:
Unemployment rate
Baseline
Upside
Downside
Loss given default
FY2024 (forecast)
4.2%
2.9%
5.7%
FY2025 (forecast)
4.5%
2.5%
6.5%
Loss given default is estimated based on historical data related to amounts recovered post write off.
Write-off policy
The Group writes off financial assets in whole or in part on the following basis:
• For Personal Finance loans, when payments on the loan reach 90 days past due, based on days since last
missed repayment, unless the loan is in a hardship arrangement or in dispute.
• For Vehicle Financing loans, the date on which all practical asset recovery efforts have been exhausted with
no reasonable expectation of further recoveries, if, prior to write off, a loan has reached 180 days in
contractual arrears and no payment has been received for 90 days it is subject to a specific provision for the
full outstanding balance.
Indicators that there is no reasonable expectation of recovery include (i) ceasing enforcement activity and (ii)
where the Group’s recovery method is foreclosing on collateral and the value of the collateral such that there is
no reasonable expectation of full recovery. Written off loans can subsequently be sent to third party collection
agents for recovery.
30 June 2023
Cash Converters International Limited
81
Notes to the financial statements
7.d)
Prepayments
Current
Other prepayments
See note 26.i for the accounting policy.
7.e)
Trade and other payables
Current
Trade payables
Accruals
30-Jun
2023
$’000
30-Jun
2022
$’000
2,544
1,684
30-Jun
2023
$’000
30-Jun
2022
$’000
1,761
1,127
17,223
14,271
18,984
15,398
The Group has financial risk management policies in place to ensure that all payables are paid within the allowed
credit period in order to avoid the payment of interest on outstanding accounts.
See note 26.o for the accounting policy.
30 June 2023
Cash Converters International Limited
82
Notes to the financial statements
7.f)
Borrowings
Current
Securitisation facility
Non-current
Securitisation facility
Total
30-Jun
2023
$'000
30-Jun
2022
$'000
109,044
51,957
27,947
16,408
136,991
68,365
The securitisation facility represents a liability owed by CCPF Receivables Trust No 1, a consolidated subsidiary
established as part of the borrowing arrangement with the Fortress Investment Group. This liability is secured
against eligible receivables (which includes Small and Medium Amount Credit Contracts issued by Cash
Converters Personal Finance and secured vehicle loans issued by Green Light Auto) which have been assigned
to the Trust. Collections from Trust receivables are used to pay interest of the securitisation facility, with the
remainder remitted to the Group twice per month. Receivables have maturities of up to 5 years and the facility
has accordingly been presented as current and non-current liabilities in line with the maturities of the underlying
receivables.
The Group renewed the loan securitisation facility with Fortress in June 2022. The facility has a three-year
availability period, with a four-year maturity term ending on 15 June 2026.
The Group closed the year with undrawn securitisation facility funding lines of $11.750 million. The Group is in
compliance with the requirements of the facility.
Reconciliation of liabilities arising from financing activities – see note 10.c.
Financing arrangements
Unrestricted access was available at balance date to the following lines of credit:
Total facilities
Securitisation facilities
Used at balance date
Securitisation facilities
Unused at balance date
Securitisation facilities
See note 26.q for the accounting policy.
30-Jun
2023
$'000
30-Jun
2022
$'000
150,000
150,000
138,250
70,250
11,750
79,750
30 June 2023
Cash Converters International Limited
83
Notes to the financial statements
Loan facility undertakings and review events
The Group’s borrowing facilities are subject to various undertakings. The securitisation facility has various
eligibility criteria which the receivables of the Group must meet to be funded under the facility. During the
reporting period there have been no events of default or potential events of default.
8
Non-financial assets and liabilities
8.a)
Inventories
New and pre-owned goods at cost
Provision for obsolete stock
New and pre-owned goods (net)
See note 26.l for the accounting policy.
30-Jun
2023
$'000
30-Jun
2022
$'000
29,439
(2,946)
26,493
25,941
(1,997)
23,944
30 June 2023
Cash Converters International Limited
84
Notes to the financial statements
8.b)
Property, plant and equipment
Cost
Balance at 1 July 2021
Additions
Additions from business combinations
Disposals
Foreign currency exchange differences
Balance at 30 June 2022
Additions
Additions from business combinations
Disposals
Foreign currency exchange differences
Balance at 30 June 2023
Depreciation
Balance at 1 July 2021
Disposals
Depreciation expense
Impairment of non-current assets
Foreign currency exchange differences
Balance at 30 June 2022
Disposals
Depreciation expense
Additions from business combinations
Impairment non-current assets
Foreign currency exchange differences
Balance at 30 June 2023
Leasehold
improvements
Plant and
equipment
Total
$'000
$'000
$'000
12,868
1,524
-
(325)
-
14,067
1,186
3,035
(1,720)
(33)
16,535
10,888
(84)
788
550
1
12,143
(1,230)
702
1,777
319
(21)
13,690
9,509
448
240
(570)
(26)
9,601
1,843
1,496
(641)
15
12,314
5,548
(178)
959
367
(13)
6,683
(535)
1,056
1,073
289
11
8,577
22,377
1,972
240
(895)
(26)
23,668
3,029
4,531
(2,361)
(18)
28,849
16,436
(262)
1,747
917
(12)
18,826
(1,765)
1,758
2,850
608
(10)
22,267
An impairment of $0.608 million has been recognised in the year ended 30 June 2023 (2022: $0.917 million),
see note 5.
See note 26.m for the accounting policy.
30 June 2023
Cash Converters International Limited
85
Notes to the financial statements
8.c)
Leases
The Group’s weighted average incremental borrowing rates applied to the lease liabilities is 8.26% (2022:
8.02%) for leases in Australia, 8.21% (2022: n/a) for leases in New Zealand and 7.33% (2022: 7.13%) for leases
in the United Kingdom.
Right-of-use assets
Cost
Balance at beginning of year
Additions
Terminations
Other remeasurements
Additions from business combinations
Lease extensions
Lease reductions
Foreign currency exchange differences
Balance at end of year
Depreciation
Balance at beginning of year
Terminations
Depreciation expense
Impairment non-current assets
Foreign currency exchange differences
Balance at end of year
Net book value
Amounts recognised in profit or loss
Depreciation expense on right-of-use assets
Interest expense on lease liabilities
Expense relating to short-term leases
Impairment non-current assets
30-Jun
2023
$’000
30-Jun
2022
$’000
82,151
1,579
(3,012)
3,231
5,602
770
(1,652)
18
88,687
78,751
4,256
(4,551)
272
2,323
2,109
(1,019)
10
82,151
31,930
(3,012)
7,109
5,610
4
41,641
18,503
(4,551)
7,703
10,257
18
31,930
47,046
50,221
7,109
5,245
298
5,610
18,262
7,703
5,487
103
10,257
23,550
The Group right-of-use assets relate to property leases. The average remaining lease term is 5.95 years (2022:
6.18 years).
See note 26.f for the accounting policy.
30 June 2023
Cash Converters International Limited
86
Notes to the financial statements
Lease liabilities
Current
Non-current
Maturity analysis
Year 1
Year 2
Year 3
Year 4
Year 5
Onwards
Less: unaccrued interest
30-Jun
2023
$'000
7,276
56,466
63,742
12,215
11,285
10,783
10,007
9,758
35,621
89,669
(25,927)
63,742
30-Jun
2022
$'000
6,854
57,963
64,817
11,467
11,016
10,186
9,833
9,281
41,457
93,240
(28,423)
64,817
The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are
monitored within the Group’s treasury function.
See note 26.f for the accounting policy.
8.d)
Goodwill
Net carrying amount
Balance at beginning of year
Recognition on business combinations
Impairment of goodwill
Foreign currency exchange differences
Balance at end of year
30-Jun
2023
$'000
30-Jun
2022
$'000
110,481
3,315
(110,481)
(36)
3,279
109,305
1,176
-
-
110,481
Goodwill related to the acquisition of Cash Converters New Zealand completed during the period as disclosed in
note 14 has been allocated to New Zealand.
See note 5 relating to the impairment of non-current assets.
30 June 2023
Cash Converters International Limited
87
Notes to the financial statements
Accounting policy
Goodwill arising on an acquisition of a business is carried at cost at the date of acquisition of the business less
accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units
(“CGUs”) that are expected to benefit from the synergies of the combination. CGUs to which goodwill has been
allocated are tested for impairment annually, or more frequently when there is an indication that the unit may
be impaired. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets
of the unit pro rata based on the carrying amount of each asset in the CGU. An impairment loss recognised for
goodwill is recognised directly in profit or loss and is not reversed in subsequent periods.
On disposal of the relevant CGU, the attributable amount of goodwill is included in the determination of the
profit or loss on disposal.
Allocation of goodwill to CGUs
Goodwill has been allocated for impairment testing purposes to the following CGUs or groups of CGUs:
Personal Finance
Store Operations
New Zealand
30-Jun
2023
$'000
30-Jun
2022
$'000
-
-
3,279
3,279
90,561
19,920
-
110,481
30 June 2023
Cash Converters International Limited
88
Notes to the financial statements
8.e)
Intangible assets
Allocation of other intangible assets to CGUs
Personal Finance
Vehicle Financing
Store Operations
New Zealand
UK
Head Office
30-Jun
2023
$'000
30-Jun
2022
$'000
4,395
1,150
3,250
5,787
1,283
4,678
20,543
4,159
1,758
4,680
-
1,406
4,986
16,989
Other intangible assets are allocated to their respective CGU and tested for impairment when impairment
indicators are identified. Intangible assets with indefinite lives included within other intangible assets are tested
for impairment annually. Refer to note 5 for details of impairment testing. The recoverable value of other
intangible assets is assessed using the same assumptions and methods as the goodwill for the related CGUs.
Categories of other intangible assets
Cost
Balance at 1 July 2021
Additions
Additions from business combinations
Disposals
Foreign currency exchange differences
Balance at 30 June 2022
Additions
Additions from business combinations
Disposals
Foreign currency exchange differences
Balance at 30 June 2023
Amortisation
Balance at 1 July 2021
Disposals
Amortisation expense
Impairment of non-current assets
Foreign currency exchange differences
Balance at 30 June 2022
Disposals
Amortisation expense
Additions from business combinations
Impairment of non-current assets
Foreign currency exchange differences
Balance at 30 June 2023
Reacquired
Rights
Trade names
& customer
relationships
Software
Total
$'000
$'000
$'000
$'000
8,629
-
987
-
(43)
9,573
-
3,749
-
37
13,359
6,173
-
497
18
(18)
6,670
-
675
-
395
33
7,773
17,377
-
86
-
-
17,463
-
2,267
-
(25)
19,705
9,135
-
221
4
-
9,360
-
220
-
59
-
9,639
21,753
892
-
(458)
(12)
22,175
1,539
108
-
60
23,882
12,853
(80)
3,440
-
(21)
16,192
-
2,654
108
-
37
18,991
47,759
892
1,073
(458)
(55)
49,211
1,539
6,124
-
72
56,946
28,161
(80)
4,158
22
(39)
32,222
-
3,549
108
454
70
36,403
30 June 2023
Cash Converters International Limited
89
Notes to the financial statements
An impairment of $454 thousand has been recognised in the year ended 30 June 2023 (2022: $22 thousand),
see note 5.
See note 26.n for the accounting policy.
8.f)
Deferred tax balances
Deferred tax assets
Allowance for expected credit losses
Accruals
Provisions
Leases
Other
Carry forward losses
Deferred tax liabilities
Fixed assets
Intangible assets
Other
30-Jun
2023
$'000
12,541
371
5,104
4,870
144
9,506
32,536
(1,053)
(1,112)
(702)
(2,867)
30-Jun
2022
$'000
11,042
546
4,585
4,349
(4)
8,136
28,654
(466)
(2,084)
(15)
(2,565)
Net deferred tax assets
29,669
26,089
Reconciliation of net deferred tax assets
Opening balance at beginning of period
Tax expense during period recognised in profit or loss
Tax on business combinations
Prior year adjustment
Other
Deferred tax asset on recognition of carry forward UK losses
Closing balance at end of period
26,089
2,798
(301)
431
652
-
29,669
22,164
5,873
(26)
(1,295)
(252)
(375)
26,089
A net deferred tax asset of $29.669 million (2022: $26.089 million) has been recognised in the consolidated
statement of financial position. There is a critical accounting judgement with respect to the recognition of
deferred tax assets including where they arise from previous years losses and will be offset against any future
taxes on profit. In making this assessment, a forward-looking estimation of taxable profit was made, based on
management’s best estimate of future performance from continuing operations as at 30 June 2023.
This includes a deferred tax asset in respect of carry forward losses of $8.607 million (2022: $8.136 million)
recognised in relation to the Group’s UK operations. Profit has been achieved in the last three years with the
FY2023 year reflecting utilisation of the carry forward losses because of taxable profits arising. Ongoing taxable
profit forecasts have supported recognising in full the deferred tax asset (“DTA”) that arises from unused tax
losses from previous years. Also included, is a deferred tax asset in respect of carry forward losses of $899
thousand (2022: nil) recognised in relation to the Group’s NZ operations.
Continuing operations in Australia made a taxable profit during the current year and is expected to be profitable
in future years, therefore supporting the recognition of net deferred tax assets arising from temporary
differences in Australia.
30 June 2023
Cash Converters International Limited
90
Notes to the financial statements
A summary of the Group’s net deferred tax asset position by geographic location is below:
Australia
New Zealand
United Kingdom
See note 26.e for the accounting policy.
30-Jun
2023
$'000
20,954
413
8,302
29,669
30-Jun
2022
$'000
17,953
-
8,136
26,089
30 June 2023
Cash Converters International Limited
91
Notes to the financial statements
8.g)
Provisions
Current
Employee benefits
Fringe benefits tax
Make good obligation of property leases
Onerous lease contracts
Other
Non-current
Employee benefits
Make good obligation of property leases
Onerous lease contracts
Movements in the provisions were as follows:
30-Jun
2023
$'000
30-Jun
2022
$'000
10,419
87
633
234
407
11,780
490
3,850
-
4,340
8,763
37
202
571
300
9,873
597
1,897
50
2,544
Employee
benefits
Fringe
benefits
tax
Make
good -
leases
Onerous
lease
contracts
Other
Total
$'000
$'000
$'000
$'000
$'000
$'000
9,360
677
-
-
897
(19)
(6)
37
-
-
-
55
(5)
-
2,099
461
621
-
300
-
12,417
1,138
-
-
198
198
2,046
101
(221)
(3)
-
-
(410)
23
-
-
(91)
-
2,046
1,053
(746)
14
10,909
87
4,483
234
407
16,120
8,710
179
-
-
852
(381)
-
29
-
2,113
80
1,003
-
523
-
12,378
259
-
-
8
-
-
-
-
-
-
835
123
(1,050)
(2)
-
-
(354)
(28)
-
-
(223)
-
835
983
(2,008)
(30)
9,360
37
2,099
621
300
12,417
2023
Carrying amount at start of year
Acquired through business
combinations
Transfer from share-based payment
reserve
Remeasurements and additions
Charged to profit or loss
Utilised during the year
Foreign currency exchange
differences
Carrying amount at end of year
2022
Carrying amount at start of year
Acquired through business
combinations
Transfer from share-based payment
reserve
Remeasurements and additions
Charged to profit or loss
Utilised during the year
Foreign currency exchange
differences
Carrying amount at end of year
See note 26.r for the accounting policy.
30 June 2023
Cash Converters International Limited
92
Notes to the financial statements
9
Issued capital
Total issued capital
30-Jun
2023
30-Jun
30-Jun
30-Jun
2022
2023
$’000
2022
$’000
Number
Number
Balance at beginning of period
627,545,015
627,545,015
251,213
251,213
Issued during the period
Balance at end of period
-
-
-
-
627,545,015
627,545,015
251,213
251,213
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Changes to the Corporations Act 2001 abolished the authorised capital and par value concept in relation to share
capital from 1 July 1998. Therefore, the Company does not have a limited amount of authorised capital and
issued shares do not have a par value.
See note 26.u for the accounting policy.
Issued capital excluding treasury shares
30-Jun
2023
Number
30-Jun
30-Jun
30-Jun
2022
Number
2023
$’000
2022
$’000
Balance at beginning of period
621,285,981
627,545,015 249,663
251,213
Treasury shares acquired by employee share
trust
Treasury shares issued by employee share trust
(5,525,046)
(6,259,034)
(1,353)
(1,550)
6,259,034
-
1,550
-
Balance at end of period
622,019,969
621,285,981 249,860
249,663
Treasury shares
Balance at beginning of period
Treasury shares acquired
Treasury shares issued
Balance at end of period
30-Jun
2023
Number
6,259,034
5,525,046
(6,259,034)
30-Jun
30-Jun
30-Jun
2022
Number
-
6,259,034
2023
$’000
1,550
1,353
-
(1,550)
2022
$’000
-
1,550
-
5,525,046
6,259,034
1,353
1,550
Shares issued to employees are recognised on a first-in-first-out basis. The shares may be acquired on market
and are held as treasury shares until such time as they are vested. Forfeited shares are reallocated in subsequent
grants. Under the terms of the trust deed, Cash Converters is required to provide the employee share trust with
the necessary funding for the acquisition of shares.
30 June 2023
Cash Converters International Limited
93
Notes to the financial statements
10
Cash flow information
10.a) Reconciliation of profit after income tax to net cash inflow from operating activities
(Loss) / profit after tax
Non-cash adjustment to reconcile profit after tax to net cash flows:
Loss on disposal of non-current assets
Amortisation
Depreciation
Movement in expected credit loss provision
Impairment of goodwill
Impairment of non-current assets
Share-based payments
Lease modification
Share of net (profit) / loss of equity accounted investment
Changes in assets and liabilities:
Trade and loan receivables
Inventories
Other assets
Trade and other payables
Provisions
Income tax payables
Net cash (used in) / provided by operating activities
30-Jun
2023
$’000
30-Jun
2022
$’000
(97,155)
11,177
16
3,549
8,867
5,071
110,481
6,672
807
(1,780)
(251)
(44,892)
(1,093)
(642)
1,279
2,340
(4,805)
(11,536)
74
4,158
9,450
6,186
-
11,196
1,375
(735)
(853)
(34,856)
659
(451)
3,447
(219)
(2,699)
7,909
Cash flows are included in the cash flow statement on a net basis. The GST component of cash flows arising from
investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as
operating cash flows.
30 June 2023
Cash Converters International Limited
94
Notes to the financial statements
10.b) Non-cash investing and financing activities
Net recognition of right of use asset and liability
Share based payment reserve transferred to retained earnings
Share based payment reserve transferred to provisions
10.c) Reconciliation of liabilities arising from financing activities
30-Jun
2023
$'000
2,162
723
198
30-Jun
2022
$'000
4,875
404
-
2023
Securitisation facility
Transaction costs and other
Lease liabilities
2022
Securitisation facility
Transaction costs and other
Lease liabilities
Opening
Net
cashflows
$'000
$'000
Non-cash
transaction
costs
$'000
Closing
$'000
70,250
(1,885)
64,817
133,182
68,000
-
(12,233)
55,767
-
626
11,158
11,784
138,250
(1,259)
63,742
200,733
70,250
(897)
64,409
133,762
-
(1,875)
(12,047)
(13,922)
-
887
12,455
13,342
70,250
(1,885)
64,817
133,182
30 June 2023
Cash Converters International Limited
95
Notes to the financial statements
11
Critical estimates and judgements
In applying the Group's accounting policies, management continually evaluates judgements, estimates and
assumptions based on experience and other factors, including expectations of future events that may have an
impact on the Group. All judgements, estimates and assumptions made are believed to be reasonable based on
the most current set of circumstances available to management. Actual results may differ from the judgements,
estimates and assumptions. Significant judgements, estimates and assumptions made by management in the
preparation of these financial statements are outlined below.
Significant accounting judgements
In the process of applying the Group’s accounting policies, management has made the following judgements,
apart from those involving estimations, which have the most significant effect on the amount recognised in the
financial statements:
• Recoverability of deferred tax assets – see note 6.c
• Classification of contingent liabilities – see note 17
• Capitalisation of configuration & customisation costs in SaaS arrangements – see note 26.z
Significant accounting estimates and assumptions
Impairment of goodwill and other intangible assets – see note 8.d
Incremental borrowing rate used in calculating lease asset and liability values – see note 8.c
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions
of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of certain assets and liabilities within the next annual reporting period are:
•
•
• Useful lives of other intangible assets – see note 26.n
•
•
• What constitutes a business combination – see note 14
• Fair value of performance rights granted – see note 21
Impairment of financial assets (including loan receivables) – see note 7.c
Impairment for inventory – see note 8.a
30 June 2023
Cash Converters International Limited
96
Notes to the financial statements
12
Financial risk management
The Group’s activities expose the Group to a variety of financial risks: market risks (including currency risk and
interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on financial performance.
Financial risk and capital management is carried out in accordance with policies approved by the Board. The
Board reviews and approves written principles of overall risk management, as well as written policies covering
specific areas such as managing capital, mitigating interest rates, liquidity, foreign exchange and credit risk. The
Audit and Risk Committee assists the Board in monitoring the implementation of risk management policies.
The Group’s treasury function provides services to the business, co-ordinates access to domestic and
international financial markets, and manages the financial risks relating to the operations of the Group. The
Group does not enter into or trade financial instruments, including derivative financial instruments, for
speculative purposes.
12.a) Categories of financial instruments
Financial assets
Cash and cash equivalents
Trade and other receivables
Loan receivables
Financial liabilities
Trade and other payables
Borrowings
30-Jun
2023
$'000
30-Jun
2022
$'000
71,565
10,219
224,729
306,513
58,085
5,332
175,653
239,070
18,984
136,991
155,975
15,398
68,365
83,763
The Group has no material financial assets or liabilities that are held at fair value. See note 12.g.
30 June 2023
Cash Converters International Limited
97
Notes to the financial statements
12.b) Market risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and
interest rates. The types of market risks to which the Group is exposed and the manner in which it manages and
measures the risk remain consistent with the previous period.
12.b) i) Foreign exchange risk
The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange
rate fluctuations arise. As a result of operations in New Zealand and the United Kingdom, the Group’s balance
sheet can be affected by movements in the AUD/NZD and AUD/GBP exchange rates. Spot exchange rates are
normally used to translate transactions into the reporting currency.
12.b) ii) Cash flow and fair value interest rate risk
The Company and the Group are exposed to interest rate risk as entities in the consolidated Group borrow funds
at variable rates and place funds on deposit at variable rates. Loans issued by the Group are at fixed rates.
Interest rate risk is managed by the Group through monitoring interest rates and detailed forecasting of the
operating cashflows of the underlying businesses.
The Company and the Group’s exposures to interest rates on financial assets and financial liabilities are detailed
in note 12.f and 12.g.
12.b) iii)Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates at the reporting
date and the stipulated change taking place at the beginning of the financial year and held constant throughout
the reporting period. A 50-basis point increase or decrease is used because this represents management’s
assessment of the possible change in interest rates.
At reporting date, if interest rates had been 50 basis points higher or lower and all other variables were held
constant, the Group’s net profit would
increase/decrease by approximately $613 thousand (2022:
increase/decrease by approximately $303 thousand).
12.c) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group. The Group measures credit risk on a fair value basis. The Group does not have any significant
credit risk exposure to any single counterparty or any group of counterparties having similar characteristics,
other than its franchisees. Refer to note 7.c. The Group has a policy of obtaining sufficient collateral or other
securities from these franchisees. Most loans within the financing divisions relate to loans made by Cash
Converters Personal Finance and Green Light Auto which may be both secured and unsecured loans. Credit risk
is present in relation to all loans made, which is managed within an agreed corporate policy on customer
acceptance and ongoing review of recoverability. For secured loans, the fair value of the credit risk considers
the underlying value of the collateral against the loan.
30 June 2023
Cash Converters International Limited
98
Notes to the financial statements
12.d)
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of directors, who have built an
appropriate liquidity risk management framework for the management of the Group’s short, medium and long-
term funding and liquidity management requirements. The Group manages liquidity risk by maintaining
adequate cash reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast
and actual cash flows and matching maturity profiles of financial assets and liabilities. Included in note 7.f is a
listing of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk.
12.e) Remaining contractual maturity for its financial liabilities
The following table details the Group’s remaining contractual maturity for its financial liabilities. The table has
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the Group can be required to pay. The table includes both interest and principal cash flows.
To the extent that interest flows are at floating rates, the undiscounted amount is derived from interest rate
curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the
Group may be required to pay.
2023
Non-interest bearing
Variable interest rate instruments
2022
Non-interest bearing
Variable interest rate instruments
1 year or
less
1 to 5
years
Total
More
than 5
years
Carrying
value
30 June
$'000
$'000
$'000
$'000
$'000
18,984
14,262
33,246
-
166,228
166,228
-
18,984
- 180,490
- 199,474
18,984
136,991
155,975
15,398
6,978
22,376
-
90,916
90,916
-
15,398
97,894
-
- 113,292
15,398
68,365
83,763
The amounts included above for variable interest rate instruments are subject to change if actual rates differ
from those applied in the above average calculations.
30 June 2023
Cash Converters International Limited
99
Notes to the financial statements
12.f)
Financial assets
The following table details the Group’s expected maturity for its financial assets. The table below has been drawn
up based on the undiscounted contractual maturities of the financial assets including interest that will be earned
on those assets except where the Group anticipates that the cash flow will occur in a different period.
2023
Non-interest bearing
Fixed interest rate instruments
Variable interest rate instruments
2022
Non-interest bearing
Fixed interest rate instruments
Variable interest rate instruments
1 year or
less
1 to 5
years
Total
More
than 5
years
$'000
$'000
$'000
$'000
54,926
7,071
15,693
77,690
47,230
6,500
9,625
63,355
-
5,008
-
5,008
-
-
-
-
-
-
-
-
-
-
-
-
54,926
12,079
15,693
82,698
47,230
6,500
9,625
63,355
The amounts included above for variable interest rate instruments are subject to change if actual rates differ
from those applied in the above average calculations.
12.g)
Fair value of financial instruments
The fair value of the Group’s financial assets and liabilities are determined on the following basis:
Financial assets and financial liabilities that are not measured at fair value on a recurring basis (but where fair
value disclosures are required)
At 30 June 2023 and 30 June 2022, the carrying amount of financial assets and financial liabilities for the
Group is considered to approximate their fair values.
The fair value of the monetary financial assets and financial liabilities is based upon market prices where a
market price exists or by discounting the expected future cash flows by the current interest rates for assets
and liabilities with similar risk profiles.
30 June 2023
Cash Converters International Limited
100
Notes to the financial statements
Financial assets and financial liabilities that are measured at fair value on a recurring basis
Subsequent to initial recognition, at fair value financial instruments are grouped into Levels 1 to 3 based on
the degree to which the fair value is observable. Levels are defined as follows:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities.
• Level 2 fair value measurements are those derived from inputs other than quoted prices included with
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
from prices).
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the
asset or liability that are not based on observable market data (unobservable inputs).
At 30 June 2023 and 30 June 2022, the Group has no material financial assets and liabilities that are measured
on a recurring basis at fair value.
13
Capital management
13.a) Risk management
The Board determines the appropriate capital structure of the Group, specifically how much is raised from
shareholders (equity) and how much is borrowed from financial institutions and capital markets (debt), in order
to finance the Group’s activities both now and in the future.
The Board considers the Group’s capital structure and its dividend policy at least twice a year ahead of
announcing results, in the context of its ability to continue as a going concern, to execute the strategy and to
deliver its business plan.
Financial risk and capital management is carried out in accordance with policies approved by the Board. The
Board reviews and approves written principles of overall risk management, as well as written policies covering
specific areas such as managing capital, mitigating interest rates, liquidity, foreign exchange and credit risk. The
Audit and Risk Committee assists the Board in monitoring the implementation of risk management policies.
13.b) Dividends
Year ended
30-June-2023
Cents per
share
$'000 Cents per
share
Year ended
30-June-2022
$'000
Recognised amounts on fully paid ordinary shares
2021 Final dividend
2022 Interim dividend
2022 Final dividend
2023 Interim dividend
Paid
Paid
Paid
Paid
14-Oct-21
14-Apr-22
14-Oct-22
14-Apr-23
Unrecognised amounts on fully paid ordinary shares
2022 Final dividend
2023 Final dividend
Paid
To be paid
14-Oct-22
13-Oct-23
1.00
1.00
6,275
6,275
12,550
1.00
1.00
6,275
6,275
12,550
1.00
6,275
1.00
6,275
30 June 2023
Cash Converters International Limited
101
Notes to the financial statements
Franking credits
Franking credits available on a tax paid basis
See note 26.v for the accounting policy.
30-Jun
30-Jun
2023
$'000
2022
$'000
72,531
66,969
30 June 2023
Cash Converters International Limited
102
Notes to the financial statements
14
Business combination
The values identified in relation to the acquisitions during the period are final as at the reporting date.
On 30 November 2022 the Group acquired the remaining 75% of the New Zealand Cash Converters network
(“CCNZ”), consisting of 11 Corporate stores and the rights to franchise fees of 11 franchise stores, for a total
consideration of $15.391 million ($13.798 million, net of cash acquired). The acquisition supports the ongoing
Group objective to acquire earnings accretive store networks, based on sensible valuation metrics, which will
accelerate Group earnings.
The trade and other assets of the following stores (collectively the “VIC Store Acquisitions”) were acquired in
the comparative year ended 30 June 2022.
Store
Corio
Dandenong
Geelong
State
VIC
VIC
VIC
14.a) Summary of acquisition
Acquisition date
30 September 2021
30 September 2021
30 September 2021
The determined fair values of the assets and liabilities acquired during the periods as at date of acquisition are
as follows:
Net assets acquired
Cash and cash equivalents
Trade and other receivables
Prepayments
Loan receivables
Provision for loan receivables
Inventories
Plant and equipment
Other intangible assets
Right-of-use assets
Deferred tax liability
Trade and other payables
Provisions
Lease liabilities
Consideration satisfied in cash
Previously recognised equity interest
New
Zealand
30-Nov-22
$'000
VIC Store
Acquisitions
30-Sep-21
$'000
1,593
556
217
12,000
(3,298)
1,456
1,681
6,016
5,602
(301)
(1,282)
(1,138)
(5,896)
17,206
15,391
5,130
28
7
-
377
-
475
240
1,073
2,323
(26)
-
(258)
(2,243)
1,996
3,172
-
Goodwill arising on acquisition
3,315
1,176
30 June 2023
Cash Converters International Limited
103
Notes to the financial statements
Goodwill arose in the CCNZ business combination because the cost of the combination included a control
premium paid to acquire the CCNZ network. In addition, the consideration paid for the combination effectively
included amounts in relation to the benefit of expected synergies, revenue growth, future market development
and the assembled workforce of the network. These benefits are not recognised separately from goodwill as the
future economic benefits from them cannot be reliably measured.
No amount of the goodwill recognised is expected to be deductible for tax purposes. Goodwill is tested annually
for impairment.
A fair value assessment of the equity interest held by the business as at acquisition date was performed, based
on the total consideration paid for the acquisition. This assessment determined that the previously held equity
interest of $5,337,812 was being held above fair value. As a result, an adjustment was made at acquisition date
to reduce the equity interest by $207,563, with an equivalent expense recognised through other expenses in the
statement of profit or loss and other comprehensive income.
14.b) Purchase consideration – cash outflow
Cash outflow to acquire business combinations
Cash consideration
Less cash balances acquired
Payment for business combinations, net of cash acquired
14.c) Revenue and profit or loss contribution
30-Jun
2023
$'000
30-Jun
2022
$'000
15,391
(1,593)
13,798
3,172
(28)
3,144
The acquired business contributed revenues of $13,810,244 and net loss before income tax of $2,565,908 to the
Group for the period from 30 November 2022 to 30 June 2023.
If the acquisition had occurred on 1 July 2022, for the year ended 30 June 2023 consolidated pro-forma revenue
for the Group would include an additional $9,177,256 and the consolidated pro-forma net profit before income
tax would include an additional profit of approximately $531,744. These amounts have been calculated using
the monthly financials provided under the previously recorded equity accounting method.
14.d) Acquisition related costs
Acquisition related costs of $658,289 (2022: $112,458) are included in other expenses in the statement of profit
or loss and in operating cash flows in the statement of cash flows.
14.e) Prior period
The business combinations completed in the previous financial year were all finalised as at 30 June 2022 and as
such there are no further changes to the initial accounting for those business combinations.
30 June 2023
Cash Converters International Limited
104
Notes to the financial statements
14.f)
Significant accounting judgements, estimates and assumptions
The Group has applied judgement in determining what constitutes a business combination as well as applying
judgement to classify all aspects of CCNZ as a single business combination – ie an aggregation of personal
finance, retail (corporate stores), franchise operations and general head office. This business combination is
structured in a way that the acquired business becomes a subsidiary of CCIL.
Judgement has been exercised in the allocation of fair value across the assets and liabilities acquired and for the
harmonisation of accounting policies of the foreign subsidiary with those of the holding company.
Separately Identifiable Intangible Assets
The Group engaged external advisors to calculate the value of any Separately Identifiable Intangible Assets
(“SIIA”), such as brand and reacquired franchise rights.
In assessing the value of the New Zealand brand asset, the Group has used a ‘Relief from Royalty’ (“RfR”)
method. The premise of the RfR approach is that the value of the intangible asset is equal to the present value
of the royalty income attributable to it, whereby the royalty income represents the cost savings that are available
by the avoidance of paying royalties to license the use of those assets from another owner.
In assessing the fair value of the reacquired franchise rights, an excess earnings approach was used where the
value of the reacquired rights was assessed as being the net present value of the future cash flows which are
expected to be generated over the remaining contractual life of the franchise agreements. The remaining
contractual life of each franchise arrangement was assessed individually based on the likelihood of the
franchisee renewing their contract at the end of the current option.
15
Post balance date business combination
Capital Cash Limited (“Capital Cash”) is the largest franchise group in the United Kingdom operating under the
Cash Converters Master Franchisor arrangement, operating 42 Cash Converters franchise stores in the United
Kingdom.
Cash Converters UK Holdings Ltd (“CCUK”) entered into a Sale and Purchase Agreement dated 5 March 2023
(“the SPA”) to acquire the entire issued capital of the Capital Cash, subject to the satisfaction or waiver of
conditions contained in the SPA.
Capital Cash has been operating in the United Kingdom for twenty years. This strategic acquisition gives Cash
Converters a corporate store footprint in the United Kingdom, and an experienced management team who will
continue to grow the Cash Converters business.
This acquisition is a core part of the Group’s strategy to acquire value accretive franchise store networks, with
this acquisition establishing a corporate base to oversee the Group’s wider European operations.
The total consideration under the SPA for the acquisition may be up to 13.9 million GBP (approximately $26.5
million at the 30 June 2023 foreign exchange rates) comprising a headline completion amount of up to 12.4
million GBP payable at completion and an earn-out payment of up to 1.5 million GBP which is to be calculated
based on the Capital Cash EBITDA for the 12-month period ending 30 September 2023.
The SPA conditions were all satisfied or waived by 6 July 2023. CCUK completed the acquisition through a cash
settlement on 6 July 2023 and attained 100% ownership and control of Capital Cash on 6 July 2023.
At completion, the preliminary headline completion amount payable was adjusted to 10.2 million GBP ($19.7
million).
30 June 2023
Cash Converters International Limited
105
Notes to the financial statements
The SPA provides for adjustments to the total consideration via an adjustment payment statement. These
adjustments will be agreed upon between the parties following the finalisation of the completion accounts as at
6 July 2023 by the Seller and the review of the Capital Cash books by CCUK.
The earn-out payment amount will be calculated based on the Capital Cash EBITDA for the 12 months ended 30
September 2023 and will be nil if EBITDA is less than 2.3 million GBP and increasing to a maximum of 1.5 million
GBP if EBITDA is 2.9 million GBP or more. Based on management accounts to 31 July 2023, it is probable that the
maximum earn-out payment will be achieved.
The initial accounting for this business combination is incomplete at the date of this annual report as:
•
•
•
Capital Cash completion accounts as at 6 July 2023 are still being finalised. The SPA allows 60 days for
the accounts to be provided and 60 days for CCUK to review and respond;
The earn-out payment and consideration adjustments, and consequently total consideration, cannot
currently be determined; and
The Group has yet to finalise judgements around the assignment of fair values to the individual assets
acquired and liabilities assumed under the business combination, identification and valuation of SIIA
and adoption of International Financial Reporting Standards (in particular Financial Instruments, Leases,
Income Taxes (tax effect accounting)) and the harmonisation of Capital Cash accounting policies with
that of the Group.
Accordingly, this post-balance date business combination is incomplete as at 30 June 2023 for the reasons stated
above.
As the Capital Cash acquisition occurred after the reporting period, no revenue or profit or loss of the acquiree
has been included in the consolidated statement of comprehensive income for the reporting period.
Acquisition related costs of $2,259,426 are included in other expenses in the statement of profit or loss and in
operating cash flows in the statement of cash flows.
30 June 2023
Cash Converters International Limited
106
Notes to the financial statements
16
Interests in other entities
16.a) Subsidiaries
Controlled entities of Cash Converters International Limited:
Name of entity
Country
incorporation
of
Ownership interest
2022
2023
Cash Converters (Cash Advance) Pty Ltd
Cash Converters Finance Corporation Pty Ltd
Cash Converters (NZ) Pty Ltd
Cash Converters Personal Finance Pty Ltd
Cash Converters Pty Ltd
Cash Converters (Stores) Pty Ltd
Cash Converters UK Holdings Ltd
Cash Converters Holdings (NZ) Ltd
Cash Converters USA Pty Ltd
CC Acquisitions Pty Ltd
Finance Administrators of Australia Pty Ltd
Green Light Auto Group Pty Limited
Mon-E Pty Ltd
Safrock Finance Corporation (QLD) Pty Ltd
CCPF Receivables Trust No 1
Cash Converters Employee Share Trust
1
2
3
4
1
1
1
1
1
1
1
2
2
2
2
2
2
2
2
2
2
3
4
Australia
Australia
Australia
Australia
Australia
Australia
UK
NZ
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100%
64.33%
100%
100%
100%
100%
100%
100%
99.285%
100%
100%
100%
100%
100%
100%
100%
100%
64.33%
100%
100%
100%
100%
100%
n/a
99.285%
100%
100%
100%
100%
100%
100%
100%
1
2
3
4
These companies are parties to the Deed of Cross Guarantee and members of the Closed Group as at 30 June 2023.
These companies are members of the tax consolidated group.
Non-controlling interest is not considered material in these subsidiaries.
Converted from a public company limited by shares to a proprietary company limited by shares on during the prior period.
16.b) Deed of cross guarantee
Cash Converters International Limited and certain wholly-owned companies (“the Closed Group”), identified in
note 16.a) above, are parties to a Deed of Cross Guarantee (“the Deed”). The effect of the Deed is that members
of the Closed Group guarantee to each creditor payment in full of any debt in the event of winding up of any of
the members under certain provisions of the Corporations Act 2001. ASIC Corporations Instrument 2016/785,
issued on 28 September 2016, provides relief to parties to the Deed from the Corporations Act 2001
requirements for preparation, audit and lodgement of financial reports and directors’ reports, subject to certain
conditions as set out therein.
Pursuant to the requirements of this Corporations Instrument, a summarised consolidated statement of profit
or loss and other comprehensive income for the year ended 30 June 2023 and consolidated statement of
financial position as at 30 June 2023, comprising the members of the Closed Group after eliminating all
transactions between members, are set out on the following pages.
Although CCPF Receivables Trust No 1 is not a party to the Deed, this entity facilitates the Fortress Investment
Group borrowings within the Group (note 7.f) and as a result, for transparency and consistency with prior
reporting periods, the Group has elected to include them within the Closed Group results below.
30 June 2023
Cash Converters International Limited
107
Notes to the financial statements
Summarised statement of profit or loss and comprehensive income
(Loss) / profit before income tax
Income tax expense
Total comprehensive income
Summary of movements in Closed Group’s retained earnings
Retained earnings at beginning of year
Transfer reserve balance
Dividend paid
Net (loss) / profit
Retained (losses) / earnings at end of year
30-Jun
2023
$'000
(91,488)
(5,657)
(97,145)
30-Jun
2022
$'000
12,642
(4,321)
8,321
30-Jun
2023
$'000
46,600
(723)
(12,550)
(97,145)
(63,818)
30-Jun
2022
$'000
51,236
(407)
(12,550)
8,321
46,600
30 June 2023
Cash Converters International Limited
108
Notes to the financial statements
Statement of financial position
Current assets
Cash and cash equivalents
Trade and other receivables
Loan receivables
Inventories
Prepayments
Total current assets
Non-current assets
Trade and other receivables
Loan receivables
Plant and equipment
Right-of-use assets
Deferred tax assets
Goodwill
Other intangible assets
Investments in associates
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Current tax payable
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained (losses) / earnings
Total equity
30-Jun
2023
$'000
62,918
2,750
182,068
26,494
2,365
276,595
1,739
42,660
6,485
46,858
21,366
3,279
19,592
-
141,979
418,574
12,990
7,196
338
109,044
11,531
141,099
56,301
27,948
4,319
88,568
30-Jun
2022
$'000
47,861
1,845
144,056
23,734
1,459
218,955
1,509
31,597
4,708
50,000
17,953
110,481
16,042
4,869
237,159
456,114
10,474
6,761
1,839
51,957
9,289
80,320
57,736
16,408
2,481
76,625
229,667
156,945
188,907
299,169
249,860
2,865
(63,818)
188,907
249,663
2,906
46,600
299,169
30 June 2023
Cash Converters International Limited
109
Notes to the financial statements
16.c)
Interests in associates
Balance at beginning of year
Net profit for year
Return on investment received
Fair value adjustment of investment held at acquisition date
Equity investment recognised under business combination
Foreign exchange adjustment
Balance at end of year
30-Jun
2023
$'000
30-Jun
2022
$'000
4,868
251
-
(208)
(5,130)
219
-
7,168
853
(2,870)
-
-
(283)
4,868
Associates are those entities over which the Company has significant influence, but not control or joint control,
over the financial and operating policies. Significant influence is the power to participate in the financial and
operating policy decisions of the investee, but not control or joint control over those policies.
The financial statements include the Company’s share of the total recognised gains and losses of associates on
an equity accounted basis, from the date that significant influence commences until the date that significant
influence ceases. If the Company’s share of losses exceeds its interest in an associate, their carrying amount is
reduced to nil and recognition of further losses is discontinued except to the extent the Company has incurred
legal or constructive obligations or made payments on behalf of the associate.
Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the
Company’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred.
Prior to 30 November 2022 the Group held an investment in the Cash Converters Holdings Limited Partnership,
the master franchisor in New Zealand. The company held a 25% equity interest (ownership and voting interest)
in all aspects of the New Zealand enterprise, including corporate stores, franchise contracts and financial
services. On 30 November 2022, the Group acquired the remaining 75% interest (refer to note 14). This business
combination is structured in such a way that the acquired business is now recognised as a 100% owned
subsidiary of CCIL.
A fair value assessment of the equity interest held by the business as at acquisition date was performed, based
on the total consideration paid for the acquisition. This assessment determined that the previously held equity
interest of $5,337,812 was being held above fair value. As a result, an adjustment was made at acquisition date
to reduce the equity interest by $207,563, with an equivalent expense recognised through other expenses in the
statement of profit or loss and other comprehensive income.
30 June 2023
Cash Converters International Limited
110
Notes to the financial statements
Summarised financial information
Summarised financial information in respect of the Group’s interest in Cash Converters Holdings Limited
Partnership is set out below. The summarised financial information below represents amounts before intragroup
eliminations.
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
17
Contingent liabilities
30-Jun
2023
$'000
30-Jun
2022
$'000
-
-
-
-
-
3,567
3,987
(386)
-
7,168
In the course of its normal business, the Group occasionally receives claims and writs for damages and other
matters arising from its operations. Where in the opinion of the Directors it is deemed appropriate, a specific
provision is made, otherwise the directors deem such matters are either without merit or of such kind or involve
such amounts that would not have a material adverse effect on the operating results or financial position of the
economic entity if disposed of unfavourably.
The Directors are not aware of any material contingent liabilities in existence as at 30 June 2023 requiring
disclosure in the financial statements.
18
Commitments
Capital expenditure
As at 30 June 2023, capital expenditure commitments were nil (2022: $645 thousand).
Other contractual commitments
Within one year
One to five years
Longer than five years
30-Jun
2023
$'000
3,094
1,567
225
4,886
30-Jun
2022
$'000
4,408
2,091
353
6,852
19
Events occurring after the reporting period
On 6 July 2023, Cash Converters UK Holdings Ltd acquired 100% of the issued capital of Capital Cash Limited.
Refer to note 15 post balance date business combinations for further details.
There were no other significant events occurring after the balance date which may affect either the Group’s
operations or results of those operations or the Group’s state of affairs.
30 June 2023
Cash Converters International Limited
111
Notes to the financial statements
20
Related party transactions
20.a) Subsidiaries
The immediate parent and ultimate controlling party of the Group is Cash Converters International Limited.
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and are not disclosed in this note.
20.b) Key management personnel compensation
Details of Directors and other members of KMP of Cash Converters International Limited during the year are:
Non-executive directors
Mr Timothy Jugmans
Mr Lachlan Given
Ms Julie Elliott
Mr Robert Hines
Mr Henry Shiner
Ms Susan Thomas
Executive directors
Mr Sam Budiselik
Mr Peter Cumins
Executive KMP
Ms Lisa Stedman
Mr James Miles
Mr Leslie Crockett
Mr Jonty Gibbs
Chairman and Non-Executive Director
Non-Executive Director
Non-Executive Director
Chair of Governance, Remuneration and Nomination Committee
Audit and Risk Committee member
Board and Investment Committee member
Non-Executive Director
Chair of Audit and Risk Committee
Chair of Board Investment Committee
Governance, Remuneration and Nomination Committee member
Non-Executive Director
Audit and Risk Committee member
Board and Investment Committee member
Governance, Remuneration and Nomination Committee member
Non-Executive Director
Audit and Risk Committee member
Board and Investment Committee member
Governance, Remuneration and Nomination Committee member
Managing Director & Chief Executive Officer
Executive Deputy Chairman
Chief Operating Officer
Chief Information Officer
Chief Financial Officer (resigned 31 December 2022)
Interim Chief Financial Officer (appointed 1 January 2023)
Chief Financial Officer (appointed 1 April 2023)
30 June 2023
Cash Converters International Limited
112
Notes to the financial statements
The aggregate compensation of the KMP of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Termination benefits
30-Jun
2023
$
4,102,071
177,923
30,579
621,934
218,500
5,151,007
30-Jun
2022
$
3,872,604
151,277
37,081
1,197,785
-
5,258,747
20.c) Transactions with other related parties
During the year an amount of $120,000 (2022: $120,000) was paid for consulting services to an entity controlled
by Mr P Cohen, the beneficial owner of EZCORP Inc, the Company’s largest shareholder.
Other than share-based payments (as disclosed in note 21) and shareholdings of KMP (as disclosed in the
remuneration report), the parent, its subsidiaries, associates and KMP made no other related party transactions
during the reporting period.
21
Share-based payments
21.a) Employee rights plan
The Cash Converters rights plan (“the Plan”), which was approved by shareholders on 18 November 2015, allows
the Directors of the Company to issue performance rights which will vest into ordinary shares in the Company
upon the achievement of certain vesting conditions.
Each right entitles the holder to subscribe for one fully paid ordinary share in the Company at the exercise price
of nil. During the reporting period, a total of 12,062,519 performance rights were granted in Tranches 33, 34, 35
and 36 to eligible employees of the Company.
The following arrangements were in existence during the current reporting period, not adjusted for rights which
have forfeited or lapsed during the current or prior periods:
Tranche
29
30
31
32
33
34
35
36
1
Vesting
Conditions1
TSR
EPS
TSR
EPS
TSR
EPS
TSR
EPS
Grant
date
29-Sep-20
29-Sep-20
26-Oct-21
26-Oct-21
04-Oct-22
04-Oct-22
25-Oct-22
25-Oct-22
Grant date fair
value
$0.096
$0.150
$0.162
$0.213
$0.119
$0.170
$0.127
$0.180
Exercise
price
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Measurement
date
30-Jun-23
30-Jun-23
30-Jun-24
30-Jun-24
30-Jun-25
30-Jun-25
30-Jun-25
30-Jun-25
Number
6,612,478
6,612,478
4,642,856
4,642,856
4,223,496
4,223,485
1,807,769
1,807,769
TSR: vesting conditions based on Total Shareholder Return, EPS: vesting conditions based on Earnings Per Share
30 June 2023
Cash Converters International Limited
113
Notes to the financial statements
21.b) Fair value of performance rights granted during the year
The weighted average fair value of the performance rights granted during the financial year is $0.15 (2022:
$0.19). Where relevant, the expected life used in the model is based on the earliest vesting date possible for
each tranche, based on the vesting conditions.
Grant date
Option pricing model
Grant date share price
Exercise price
Expected volatility
Option life
Dividend yield
Risk-free interest rate
Tranche 33
04-Oct-22
Hoadley 1
$0.23
$0.00
45.00%
2.74 years
8.33%
3.26%
Tranche 34
04-Oct-22
Hoadley 2
$0.23
$0.00
45.00%
2.74 years
8.33%
3.26%
Tranche 35
25-Oct-22
Hoadley 1
$0.24
$0.00
45.00%
2.68 years
8.33%
3.55%
Tranche 36
25-Oct-22
Hoadley 2
$0.24
$0.00
45.00%
2.68 years
8.33%
3.55%
Hoadley Trading and Investment Tools
Hoadley 1
Hoadley 2
Hoadley Hybrid ESO Model - Relative TSR vs Peer Group Monte-Carlo simulation
Hoadley ESO2 trinomial model
21.c) Movement in performance rights during the year
The following table illustrates the number of, and movements in, performance rights during the year. The
performance rights were issued at no charge, and the weighted average exercise price is nil. No rights were
exercisable at the end of the current year. Certain performance rights may vest on the publication of these
results for FY2023.
Outstanding at beginning of year
Granted during year
Forfeited / lapsed during year
Exercised during year
Cash settled at vesting
Outstanding at end of year
2023
Number
26,863,552
12,062,519
(3,431,814)
(6,259,034)
(2,052,076)
27,183,147
2022
Number
17,981,746
9,285,712
(403,906)
-
-
26,863,552
To be cash settled
1,711,458
2,052,076
21.d) Share options exercised during the year
6,259,034 shares were issued as a result of the exercise of performance rights during the financial year. No
shares have been issued as a result of the exercise of share options or performance rights since the end of the
financial year. No share options were exercised during the year ended 30 June 2022.
30 June 2023
Cash Converters International Limited
114
Notes to the financial statements
21.e) Share options forfeited / lapsed during the year
Tranche
Year ended 30 June 2023
29
30
31
32
33
34
Year ended 30 June 2022
27
28
31
32
Grant date
Number
29-Sep-20
29-Sep-20
26-Oct-21
26-Oct-21
4-Oct-22
4-Oct-22
9-Jun-20
9-Jun-20
26-Oct-21
26-Oct-21
169,461
169,461
789,474
789,474
756,972
756,972
3,431,814
126,765
126,765
75,188
75,188
403,906
21.f)
Share options outstanding at year end
The total number of options outstanding at 30 June 2023 was 27,183,147 (2022: 26,863,552). The equivalent of
1,711,458 options will be cash settled at their vesting dates if they are determined under the Plan rules to vest.
A provision has been recognised for these at 30 June 2023.
Tranche
Vesting
condition
Grant date
Grant date
fair value
Exercise
price
Measurement
date
Number
29
30
31
32
33
34
35
36
TSR
EPS
TSR
EPS
TSR
EPS
TSR
EPS
29-Sep-20
29-Sep-20
26-Oct-21
26-Oct-21
4-Oct-22
4-Oct-22
25-Oct-22
25-Oct-22
$0.096
$0.150
$0.162
$0.213
$0.119
$0.170
$0.127
$0.180
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
30-Jun-23
30-Jun-23
30-Jun-24
30-Jun-24
30-Jun-25
30-Jun-25
30-Jun-25
30-Jun-25
4,539,092
4,539,092
3,778,194
3,778,194
3,466,524
3,466,513
1,807,769
1,807,769
27,183,147
The weighted average remaining contractual life for the options outstanding at 30 June 2023 was 1.1 years
(2022: 1.1 years).
30 June 2023
Cash Converters International Limited
115
Notes to the financial statements
22
Remuneration of auditors
The auditor of Cash Converters International Limited is Deloitte Touche Tohmatsu.
Audit / review of the financial report
- Group
-
Subsidiaries
Other assurance and agreed-upon procedures under
other legislation or contractual arrangements
Other services
-
Taxation services
30-Jun
2023
30-Jun
2022
1,124,496
127,836
748,417
125,316
24,885
46,200
9,810
32,473
1,287,027
952,406
23
(Loss) / earnings per share
23.a)
(Loss) / earnings per share
Basic
Diluted
30-Jun
2023
cents
(15.54)
(15.54)
23.b) Reconciliations of (loss) / earnings used in calculating earnings per share
30-Jun
2023
$'000
30-Jun
2022
cents
1.80
1.73
30-Jun
2022
$'000
Basic and diluted (loss) / earnings per share
(Loss) / profit attributable to shareholders of the Company used in
calculating (loss) / earnings per share
(97,155)
11,177
23.c) Weighted average number of shares used as the denominator
Weighted average number of shares - basic
Dilutive effect of performance rights
Weighted average number of shares - diluted
30-Jun
2023
Number
30-Jun
2022
Number
625,253,983
25,726,260
650,980,243
621,285,981
24,811,476
646,097,457
30 June 2023
Cash Converters International Limited
116
Notes to the financial statements
24
Assets pledged as security
See note 7.a for cash and cash equivalents designated as restricted cash to operate the securitisation facility and
for cash on deposit as security for banking facilities.
See note 7.f for the borrowing facility secured against eligible receivables.
25
Parent entity financial information
The financial information of the parent entity, Cash Converters International Limited has been prepared on the
same basis as the consolidated financial report.
Statement of financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
Comprehensive income
Loss for the year
Other comprehensive income
Total comprehensive loss
30-Jun
2023
$'000
30-Jun
2022
$'000
40
292,485
292,525
65
308,218
308,283
470
-
470
292,055
2,082
-
2,082
306,201
249,860
2,277
39,918
292,055
249,663
2,495
54,043
306,201
30-Jun
2023
$'000
30-Jun
2022
$'000
(853)
-
(853)
(915)
-
(915)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
Cross guarantees have been provided by the parent entity and its controlled entities as listed in note 16.
Cash Converters International Limited has provided a cross guarantee to HSBC for a BACS facility provided to
CCUK.
30 June 2023
Cash Converters International Limited
117
Notes to the financial statements
26
Summary of significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated
financial statements to the extent they have not already been disclosed in the other notes above. These policies
have been consistently applied to all the years presented, unless otherwise stated. The financial statements are
for the group consisting of Cash Converters International Limited and its subsidiaries.
26.a) Principles of consolidation and equity accounting
The consolidated financial statements comprise the financial statements of Cash Converters International
Limited and entities controlled by the Company and its subsidiaries (the Group, as outlined in note 16).
Control is achieved when the Company:
• has power over the investee;
•
• has the ability to use its power to affect its returns.
is exposed, or has rights, to variable returns from its involvement with the investee; and
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there
are changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when
the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or
disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive
income from the date the Company gains control until the date when the Company ceases to control the
subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company
and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of
the Company and to the non-controlling interests even if this results in the non-controlling interests having a
deficit balance.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation.
26.b) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker.
Segment reporting is at note 2.
30 June 2023
Cash Converters International Limited
118
Notes to the financial statements
26.c)
Foreign currency translation
Both the functional and presentation currency of Cash Converters International Limited and its Australian
subsidiaries is Australian dollars ($). The functional and presentation currency of the non-Australian Group
companies is the national currency of the country of operation.
As at the reporting date, the assets and liabilities of foreign subsidiaries are translated into Australian dollars at
the rate of exchange ruling at the reporting date and the statements of comprehensive income are translated
at the average exchange rates for the year. The exchange differences arising on the translation are taken directly
to a separate component of equity, the foreign currency translation reserve.
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated
at the rate of exchange ruling at the balance sheet date. Foreign currency differences arising on translation are
recognised in the income statement.
26.d) Revenue recognition
Accounting policy is at note 3.
26.e)
Income tax
Income tax is accounted for using the balance sheet method. Accounting income is not always the same as
taxable income, creating timing differences. These differences usually reverse over time. Until they reverse, a
deferred tax asset or liability must be recognised in the statement of financial position.
Current taxes
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the
taxable profit or tax loss for the period. Current tax assets and liabilities are measured at the amount expected
to be recovered from, or paid to, taxation authorities. All are calculated at the tax rates and tax laws enacted or
substantively enacted by the balance sheet date.
Deferred taxes
Deferred income tax liabilities are recognised for all taxable temporary differences. Deferred income tax assets
are recognised for all deductible temporary differences, carried forward unused tax assets and unused tax losses,
to the extent it is probable that taxable profit will be available to utilise them. However, deferred tax assets and
liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of
assets and liabilities (other than as a result of a business combination) that affect neither taxable income nor
accounting profit. A deferred tax liability is not recognised in relation to the temporary differences arising from
the initial recognition of goodwill.
The carrying amount of deferred income tax assets is reviewed at balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to utilise them.
30 June 2023
Cash Converters International Limited
119
Notes to the financial statements
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised, or the liability is settled, based on tax rates and tax laws that have been enacted or
substantively enacted at the balance sheet date.
Deferred tax assets and liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the statement of comprehensive income,
except when it relates to items credited or debited directly to equity, in which case the deferred tax is also
recognised directly in equity, or where it arises from the initial accounting for a business combination, in which
case it is taken into account in the determination of goodwill or excess.
26.f)
Leases
The Group assesses whether a contract is or contains a lease, at inception of the contract. A contract is, or
contains a lease, if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to control the use of an identified
asset, the Group assesses whether:
• The contract involves the right of use of an identified asset – this may be specified explicitly and should be
physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier
has a substantive substitution right, then the asset is not identified;
• The Group has the right to obtain substantially all of the economic benefits from the use of the asset
throughout the period of use; and
• The Group has the right to direct the use of the asset.
At inception or reassessment of a contract that contains a lease component, the Group allocates the
consideration in the contract to each lease component based on their relative stand-alone prices.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease i.e. the date the underlying
asset is available for use. Right-of-use assets are subsequently measured at cost, less any accumulated
depreciation and impairment losses and adjusted for any remeasurement of lease liabilities.
The cost of the right-of-use asset comprises the initial lease liability amount, initial direct costs incurred when
entering into the lease less lease incentives received and an estimate of the costs to be incurred in dismantling
and removing the underlying asset and restoring the site on which it is located to the condition required by the
terms and conditions of the lease.
Unless the Group is reasonably certain of obtaining ownership of the leased asset at the end of the lease term,
the recognised right-of-use asset is depreciated on a straight-line basis over the shorter of its estimated useful
life and the lease term.
An impairment review is undertaken for any right-of-use asset that shows indicators of impairment and an
impairment loss is recognised against any right-of-use asset that is impaired.
30 June 2023
Cash Converters International Limited
120
Notes to the financial statements
Lease liabilities
The lease liability is initially measured at the present value of the fixed and variable lease payments to be made
over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less
any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a
purchase option reasonably certain to be exercised by the Group. The lease payments are discounted using the
interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases
in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would
have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and conditions.
Lease payments to be made under reasonably certain extension options are also included in the measurement
of the liability.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease
liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments
made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use
asset) whenever:
•
the lease term has changed or there is a significant event or change in circumstances resulting in a change in
the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting
the revised lease payments using a revised discount rate;
the lease payments change due to changes in an index or rate or a change in expected payment under a
guaranteed residual value, in which case the lease liability is remeasured by discounting the revised lease
payments using an unchanged discount rate (unless the lease payments change is due to a change in a
floating interest rate, in which case a revised discount rate is used); and
•
• a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case
the lease liability is remeasured based on the lease term of the modified lease by discounting the revised
lease payments using a revised discount rate at the effective date of the modification.
The Group adjusts the lease liability due to changes in lease payments and lease terms during the period.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases i.e. those leases that have
a lease term of 12 months or less. It also applies the lease of low-value assets recognition exemption to leases
that are considered of low value (less than $7,500). Payments associated with short-term leases (buildings,
equipment and vehicles) and all leases of low-value assets are recognised on a straight-line basis as an expense
in profit or loss. Low-value assets comprise IT equipment and small items of office furniture.
Incremental borrowing rate
To determine the incremental borrowing rate, the Group:
• where possible, uses recent third-party financing received by the individual lessee as a starting point,
adjusted to reflect changes in financing conditions since third party financing was received; and
• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by
the Group, which does not have recent third-party financing, and adjustments specific to the lease (e.g. term,
country, currency and security).
30 June 2023
Cash Converters International Limited
121
Notes to the financial statements
Extension and termination options
Extension and termination options are included in several property leases across the Group. These are used to
maximise operational flexibility in terms of managing the assets used in the Group’s operations. Most of the
extension and termination options held are exercisable only by the Group and not by the respective lessor.
In determining the lease term, management considers all facts and circumstances that create an economic
incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods
after termination options) are only included in the lease term if the lease is reasonably certain to be extended
(or not terminated).
The lease term is reassessed if an option is exercised (or not exercised) or the Group becomes obliged to exercise
(or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant
change in circumstances occurs, which affects this assessment, and that is within the control of the lessee.
Where “make-good” obligations exist in leases, the amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at reporting date, taking into account the risks and
uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle
the present obligation, the carrying amount is the present value of those future cash flows. The assessment of
the present value of the future obligation requires the application of judgment.
26.g) Business combinations
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration
for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given,
liabilities incurred or assumed, and equity instruments issued by the consolidated entity in exchange for control
of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition
under AASB 3 Business Combinations are recognised at their fair value at the acquisition date, except that:
• deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are
recognised and measured in accordance with AASB 112 Income Taxes and AASB 119 Employee Benefits
respectively;
liabilities or equity instruments related to the replacement by the consolidated entity of an acquiree’s share-
based payment awards are measured in accordance with AASB 2 Share-based Payment; and
•
• assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 Non-current Assets
Held for Sale and Discontinued Operations are measured in accordance with that Standard.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the consolidated entity reports provisional amounts for the items for which the accounting
is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or
liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of
the acquisition date that, if known, would have affected the amounts recognised as of that date. The
measurement period is the period from the date of acquisition to the date the consolidated entity obtains
complete information about facts and circumstances that existed as of the acquisition date – and is subject to a
maximum of one year.
30 June 2023
Cash Converters International Limited
122
Notes to the financial statements
26.h)
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair
value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash inflows which are largely independent of the
cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than
goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each
reporting period.
26.i)
Prepayments
Prepayments for goods and services which are to be provided in future years are recognised as prepayments
and amortised over the period in which the economic benefits are received.
26.j)
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term, highly liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings
in current liabilities in the balance sheet.
26.k) Trade receivables
Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an
active market are classified as trade and other receivables and are measured at amortised costs using the
effective interest method, less any impairment. Interest income is recognised by applying the effective interest
rate, except for short-term receivables when the effect of discounting is immaterial.
The group applies the simplified approach to measuring expected credit losses which uses a lifetime expected
loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been
grouped based on shared credit risk characteristics and the days past due.
26.l)
Inventories
Inventories are valued at the lower of cost and net realisable value. Costs, including purchase costs are assigned
to individual inventory items on hand. Net realisable value represents the estimated selling price less all
estimated costs of completion and costs necessary to make the sale.
When determining the net realisable value of inventories, an estimation is made as to the costs necessary to
make the sale in the ordinary course of business. Judgement is applied to determine which costs are necessary
to make the sale considering the specific facts and circumstances, including the nature of the inventories.
30 June 2023
Cash Converters International Limited
123
Notes to the financial statements
26.m) Property, plant and equipment
Segments other than New Zealand
Plant and equipment and leasehold improvements are stated at cost less accumulated depreciation and
impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event
that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the
amounts payable in the future to their present value as at the date of acquisition.
Depreciation is provided on plant and equipment. Depreciation is calculated on a straight-line basis so as to write
off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual
value. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever
is the shorter, using the straight-line method. The estimated useful lives, residual values and depreciation
method are reviewed at the end of each annual reporting period.
The following estimated useful lives are used in the calculation of depreciation:
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computer equipment
New Zealand segment
8 years
5 years
8 years
3 years
Plant and equipment and leasehold improvements are stated at cost less accumulated depreciation and
impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. Assets are
depreciated from the date of installation/first use, whichever is sooner.
Depreciation is provided on leasehold improvements and plant and equipment. Depreciation is calculated on a
diminishing value basis in accordance with the rates set by the New Zealand Inland Revenue Department.
26.n)
Intangible assets
Reacquired rights and customer relationships acquired through business combinations are recognised at fair
value at acquisition date less accumulated amortisation and impairment.
Trade names / brand names relating to repurchased sub-master licenses both overseas and in Australia are
recognised at cost less accumulated amortisation.
Software development expenditure is recognised as an asset when it is possible that future economic benefits
attributable to the asset will flow. Software assets are recognised at cost less accumulated amortisation.
Intangible assets are amortised as follows:
Asset
Reacquired rights
Customer relationships
Trade names
Software
Amortisation period
The remaining life of each franchise agreement as at the acquisition date
Useful life of 5 years based on historic average customer relationships
Indefinite life intangible
Useful life of 5 years based on historic experience
Key estimate – useful lives of other intangible assets
The Company reviews the estimated useful lives of other intangible assets at the end of each annual reporting
period. The estimation of the remaining useful lives of other intangible assets requires the entity to make
significant estimates based on both past performance and expectations of future performance.
30 June 2023
Cash Converters International Limited
124
Notes to the financial statements
26.o) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade
and other payables are presented as current liabilities unless payment is not due within 12 months after the
reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost
using the effective interest method.
26.p) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to
extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is
measured as the difference between the carrying amount of the financial liability and the fair value of the equity
instruments issued.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting period.
26.q) Borrowing costs
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that
it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-
down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn
down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility
to which it relates.
30 June 2023
Cash Converters International Limited
125
Notes to the financial statements
26.r) Provisions
Provisions are recognised when the Group has a present obligation, the future sacrifice of economic benefits is
probable, and the amount of the provision can be measured reliably.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where
a provision is measured using the cash flows estimated to settle the present obligation, the carrying amount is
the present value of those cash flows.
When some or all the economic benefits required to settle a provision are expected to be recovered from a third
party, the receivable is recognised as an asset if it is virtually certain that recovery will be received, and the
amount of the receivable can be measured reliably.
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long
service leave and personal leave when it is probable that settlement will be required, and they are capable of
being measured reliably. Liabilities recognised in respect of short-term employee benefits are measured at their
nominal values using the remuneration rate expected to apply at the time of settlement. Liabilities recognised
in respect of long-term employee benefits are measured as the present value of the estimated future cash
outflows to be made by the Group in respect of services provided by employees up to reporting date.
The Group is required to make good each of its lease premises to their original condition at the end of the
respective lease terms. A provision has been recognised for the present value of the estimated expenditure
required.
26.s)
Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and annual leave that are expected to be
settled wholly within 12 months after the end of the period in which the employees render the related service
are recognised in respect of employees’ services up to the end of the reporting period and are measured at the
amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee
benefit obligations in the balance sheet.
Other long-term employee benefit obligations
Liabilities for long service leave and annual leave that are not expected to be settled wholly within 12 months
after the end of the period in which the employees render the related service. These obligations are measured
as the present value of expected future payments to be made in respect of services provided by employees up
to the end of the reporting period using the projected unit credit method. Consideration is given to expected
future wage and salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using appropriate market yields at the end of the reporting with terms that match, as
closely as possible, the estimated future cash outflows. Remeasurements as a result of experience adjustments
and changes in actuarial assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an
unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the
actual settlement is expected to occur.
30 June 2023
Cash Converters International Limited
126
Notes to the financial statements
26.t)
Share-based payments
The Group provides benefits to executives of the Group in the form of share-based payment transactions,
whereby eligible employees render services in exchange for options (equity-based transactions). These
performance rights are indeterminate rights and confer the right (following valid exercise) to the value of an
ordinary Share in the Company at the time, either settled in Shares that may be issued or acquired on-market,
or settled in the form of cash, at the discretion of the Board (a feature intended to ensure appropriate outcomes
in the case of terminations).
The current plan to provide these benefits is the Executive Performance Rights Plan. The cost of the equity-
settled transactions with employees is measured by reference to the fair value of the equity instruments at the
date at which they are granted. The fair value is determined by using an appropriate valuation methodology.
The cost of equity-based transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled (the vesting period), ending on the date
on which the relevant employees become fully entitled to the award (vesting date).
At each subsequent reporting date until vesting, the cumulative charge to the profit or loss is the product of:
• The grant date fair value of the award;
• The current best estimate of the number of the awards that will vest, taking into account such factors as the
likelihood of non-market performance conditions being met; and
• The expired portion of the vesting period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional
upon a market condition. Where vesting is conditional upon a market condition and awards do not ultimately
vest, amounts previously charged to the share-based payment reserve are reversed directly to retained earnings,
and not to profit and loss.
Where the terms of an equity-settled award are modified, as a minimum, an expense is recognised as if the
terms had not been modified. In addition, an expense is recognised for any increase in the value of the
transaction as a result of the modification, as measured at the date of modification.
For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured
initially at the fair value of the liability. At each reporting date until the liability is settled, and at the date of
settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss
for the year.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
dilutive earnings per share.
26.u) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
Where Cash Converters purchases the Company’s equity instruments as a result of a share-based payment plan,
the consideration paid, including and directly attributable incremental costs (net of income taxes) is deducted
from equity attributable to the owners of Cash Converters as treasury shares. Shares held in the Cash Converters
Employee Share Trust are disclosed as treasury shares and deducted from contributed equity.
26.v) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the reporting period but not distributed at the end of the
reporting period.
30 June 2023
Cash Converters International Limited
127
Notes to the financial statements
26.w)
(Loss) / Earnings per share
Basic (loss) / earnings per share
Basic (loss) / earnings per share is calculated by dividing:
•
the (loss) / profit attributable to owners of the company, excluding any costs of servicing equity other than
ordinary shares
• by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year and excluding treasury shares.
Diluted (loss) / earnings per share
Diluted (loss) / earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account:
•
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares, and
the weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
•
Where EPS is negative, DEPS is reported at the same value as EPS.
26.x) Rounding of amounts
The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191, dated 24 March 2016, and in accordance with that Corporations Instrument
amounts in the financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.
26.y)
Indirect taxes (GST & VAT)
Revenues, expenses and assets are recognised net of the amount of associated indirect taxes, unless the indirect
tax incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of indirect tax receivable or payable. The net
amount of indirect tax recoverable from, or payable to, the taxation authority is included with other receivables
or payables in the balance sheet.
The indirect tax components of cash flows arising from investing or financing activities which are recoverable
from, or payable to the taxation authority, are presented as operating cash flows.
26.z)
Software-as-a-Service (SaaS) arrangements
SaaS arrangements are service contracts providing the Company with the right to access the cloud provider’s
application software over the contract period. Costs incurred to configure or customise, and the ongoing fees to
obtain access to the cloud provider's application software, are recognised as operating expenses when the
services are received.
Some of these costs incurred are for the development of software code that enhances or modifies, or creates
additional capability to, existing on-premise systems and meets the definition of and recognition criteria for an
intangible asset. These costs are recognised as intangible software assets and amortised over the useful life of
the software on a straight-line basis. The useful lives of these assets are reviewed at least at the end of each
financial year, and any change accounted for prospectively as a change in accounting estimate.
30 June 2023
Cash Converters International Limited
128
Directors’ declaration
Directors’ declaration
The Directors declare that:
a)
in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable;
in the Directors’ opinion, the attached financial statements are in compliance with International Financial
Reporting Standards, as stated in note 1 to the financial statements;
in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the
Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of
the financial position and performance of the Group; and
the Directors have been given the declarations required by s295A of the Corporations Act 2001.
b)
c)
d)
At the date of this declaration the Company is within the class of companies affected by ASIC Corporations
(Wholly owned Companies) Instrument 2016/785. The nature of the deed of cross guarantee is such that each
company which is party to the deed guarantees to each creditor payment in full of any debt in accordance with
the deed of cross guarantee.
In the Directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which
the ASIC Corporations (Wholly owned Companies) Instrument 2016/785 applies, as detailed in note 16 to the
financial statements will, as a group, be able to meet any obligations or liabilities to which they are or may
become subject, by virtue of the deed of cross guarantee.
Signed in accordance with a resolution of the directors made pursuant to s295(5) of the Corporations Act 2001.
On behalf of the directors
Sam Budiselik
Managing Director
Perth, Western Australia
30 August 2023
30 June 2023
Cash Converters International Limited
129
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2
Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
Independent Auditor’s Report
to the members of
Cash Converters International Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Cash Converters International Limited (the “Company”) and its subsidiaries
(the “Group”) which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including material
accounting policy information and other explanatory information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
• Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial performance for
the year then ended; and
• Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We
are independent of the Group in accordance with the auditor independence requirements of the Corporations Act
2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial report for the current period. These matters were addressed in the context of our audit of the financial report
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
130
Key Audit Matter
How the scope of our audit responded to the Key Audit
Matter
Allowance for expected credit loss – loan receivables
As disclosed in Note 7.c), the carrying value of loan
receivables as at 30 June 2023 was $224.7 million, net of
allowance for expected credit loss (‘ECL’) of $46.6 million.
Loans subject to the allowance for expected credit losses
include personal loans, pawnbroking loans and vehicle
finance loans.
Significant management
determining expected credit losses, including:
judgement
is necessary
in
•
•
the identification of loans with significant increase in
credit risk to determine whether a 12 months or
lifetime ECL should be recognised;
assumptions used in the ECL models such as the
financial condition of the counterparty, repayment
capacity, any collateral value and forward-looking
macroeconomic factors disclosed in note 7.c) which
impact on the estimate of loss given default; and
• management judgements used in the calculation of
overlays to the ECL models.
Impairment of goodwill and other non-current assets
As disclosed in Note 5 an impairment charge of $117.2
million was recorded across goodwill in the personal
finance and store operations segments as well as multiple
individual retail stores consisting of right-of use assets,
intangible assets and plant and equipment.
An assessment is made for indicators of impairment for
each cash generation unit including the separate retail
stores (as individual cash generating units) as to whether
any non-current asset within the store may be impaired at
balance date.
Goodwill is monitored and tested for impairment at the
operating segment level.
Management undertakes impairment testing to test the
recoverability of goodwill and indefinite life intangible
assets annually.
The assessment of the recoverable value requires
significant judgement in respect of assumptions and
estimates in preparing a value in use model (‘VIU’) such as:
•
•
•
discount rates;
forecast retail and pawn broking growth rates;
forecast loan volumes including the expected impact
of the PEA legislation on the small amount credit
contracts; and
forecast bad debt levels.
•
Our procedures included, but were not limited to:
•
•
•
•
•
•
•
obtaining an understanding of credit risk judgements made by
management in the ECL models;
understanding the key controls management have in place in
relation to loan originations, collections, arrears management
and the estimate of the expected credit losses;
challenging the assumptions and methodology used to
determine the timing of recognition of loss events and
significant increases in credit risk, valuation of collateral,
probability of default and loss given default;
testing on a sample basis the accuracy and completeness of
the historical data utilised in the models;
in conjunction with our credit modelling specialists,
o
o
o
developing an expected range of the allowance for
expected credit losses;
testing the mathematical accuracy of the ECL
models through reperformance;
assessing modelled base
historical losses;
losses against actual
challenging management’s judgements in respect of overlays
recognised due to macroeconomic factors; and
assessing the adequacy of the disclosures in Note 7.c).
Our procedures included, but were not limited to:
•
obtaining an understanding of the key judgements made by
management in the VIU models;
obtaining an understanding of the key control's management
has in place in relation to the estimate of the recoverable
amount of the goodwill, other intangible assets and other
non-current assets;
comparing the forecasts used in the impairment assessment
to the Board approved business plan;
assessing historical forecasting accuracy by comparing actual
results to forecast;
in conjunction with our valuation experts, we challenged the
key assumptions and methodologies used, in particular:
o
o
o
o
o
the discount rate against that of comparable
companies;
forecast loan volumes for small amount credit
contract personal loans based on the expected
impact of the change in legislation for the expected
reduction in the loan book;
forecast loan volumes for other personal loan
products against recent actual levels and related
trending;
forecast bad debt levels for personal loans; and
forecast retail and pawn broking revenue growth
rates.
sample testing management’s models for mathematical
accuracy including the discrete period for cash flows due to
different lease terms impacting the individual retail store
models; and
assessing the adequacy of the disclosures in the Note 5.
131
•
•
•
•
•
•
Key Audit Matter
How the scope of our audit responded to the Key Audit
Matter
Acquisition of New
Zealand master
franchisor
As disclosed in Note 14 the Group completed the
acquisition of Cash Converters New Zealand Limited (the
New Zealand master franchisor) on 30 November 2022, for
total purchase consideration of $20.5 million which
includes goodwill and intangibles of $3.3 million and $6.0
million respectively.
Significant judgement was required in assessing the
appropriateness of the acquisition accounting, including:
•
•
•
•
concluding on the date that control was obtained by
the Sale and Purchase
the Company under
Agreement;
valuing the expected credit loss allowance against
personal loans receivable
identifying and valuing the identifiable intangible
assets acquired, including reacquired franchise rights
and brand name; and
the impact of the transaction on associated tax
balances, including the deferred tax impact on reset
tax cost bases.
•
•
•
•
•
•
Our procedures included, but were not limited to:
•
reading and understanding the Sale and Purchase Agreement
to understand the nature of the transaction, and the
consideration;
assessing the acquisition date;
assessing the fair value of consideration transferred;
understanding management’s controls over the valuation
process for the identification of the assets acquired and
liabilities assumed
including consideration of contingent
assets or liabilities;
obtaining a copy of the management’s expert’s valuation
report that was commissioned to determine the fair values at
acquisition date of intangible assets acquired;
assessing the independence, competence and objectivity of
management’s expert;
assessing,
internal valuation
specialists, the identification of assets acquired and liabilities
assumed, and the appropriateness of the methodologies and
assumptions used by management and their experts, including
the following:
-
reacquired franchise rights: assessing the methodologies
applied in valuing the rights, and the reasonableness of
including assumed agreement
critical assumptions
renewal periods, forecast excess earnings and discount
rate; and
in conjunction with our
-
brand name: assessing the methodologies applied in
relation
the
reasonableness of critical assumptions such as forecast
cash flows, royalty rate and discount rate;
the brand name, and
to valuing
•
assessing, in conjunction with our internal taxation specialists,
the calculation and valuation of the deferred tax balances
arising on the transaction.
• we also assessed the adequacy of the disclosures in Note 14.
Other Information
The directors are responsible for the other information. The other information comprises the information included in
the Group’s annual report for the year ended 30 June 2023, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
132
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as
the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view
and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may
intentional omissions,
misrepresentations, or the override of internal control.
involve collusion, forgery,
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the financial report. We are responsible for the direction, supervision
and performance of the Group’s audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
133
From the matters communicated with the directors, we determine those matters that were of most significance in the
audit of the financial report of the current period and are therefore the key audit matters. We describe these matters
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 25 to 46 of the Directors’ Report for the year ended 30
June 2023.
In our opinion, the Remuneration Report of Cash Converters International Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
Peter Rupp
Partner
Chartered Accountants
Perth, 30 August 2023
134
Shareholder information
As at 18 August 2023
Distribution of holders of equity securities
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Voting rights
Holders
Number
619
1,076
589
1,208
348
3,840
Fully paid
ordinary
shares
Number
246,490
3,045,425
4,649,423
43,720,517
575,883,160
627,545,015
Cash Converters International Limited fully-paid ordinary shares carry voting rights of one vote per share.
Less than marketable parcel of shares
There were 1,076 holders of less than a marketable parcel of ordinary shares.
Substantial shareholders
Ordinary shareholder
Number of shares
% of issued
shares
1
EZCORP Inc
275,314,157
43.87%
30 June 2023
Cash Converters International Limited
135
Twenty largest equity security holders
Ordinary shareholder
1
2
3
4
5
6
7
EZCORP INC
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LTD
MR TIMOTHY JOHN HILBIG
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
RIOLANE HOLDINGS PTY LTD
MRS LILIAN JEANETTE WARMBRAND + MR ASHLEY PAUL
WARMBRAND
CPU SHARE PLANS PTY LIMITED
MRS LILIAN JEANETTE WARMBRAND
8
9
10 MR SAM WILLIAM BUDISELIK
11
12
13 MR KAMIL UMIT YESILYURT
14 MR PETER CUMINS
15 HOPES & WISHES PTY LTD
BNP PARIBAS NOMS PTY LTD
VADINA PTY LIMITED
16
17
18 MR ALASTAIR EDWARD SCHWIER
19
ACRES HOLDINGS PTY LTD
KAMALA HOLDINGS PTY LTD
20
Number of shares % of issued
shares
273,939,157
40,395,230
38,393,156
19,000,000
17,177,348
6,737,226
5,833,385
5,525,046
5,434,529
4,059,098
3,900,000
3,662,205
3,550,000
3,073,468
3,050,000
3,025,227
2,718,750
2,600,000
2,500,000
43.65%
6.44%
6.12%
3.03%
2.74%
1.07%
0.93%
0.88%
0.87%
0.65%
0.62%
0.58%
0.57%
0.49%
0.49%
0.48%
0.43%
0.41%
0.40%
2,154,896
0.34%
444,573,825
71.19%
30 June 2023
Cash Converters International Limited
136