On December 7, 2018, FE Investments Group (ASX: FEI) came forward and issued a presentation which contained information related to the half-year results. As per the presentation, the company has witnessed favorable momentum in the results of 1HFY19. At the end of September 30, 2018, the company had a loan book amounting to $52 million and this metric was primarily supported by the online sales, SME business lending as well as LeaseTech Equipment Finance Leasing. The company also witnessed the strong momentum in the revenues. Let us have a quick look at the income statement of the company. The company has generated revenues from three components namely “finance lease revenue", “interest income” as well as “fee income and other”. The group ended September 2018 (half year) with the revenues amounting to $6.4 million while in the same period of the previous year, it generated $4.8 million. The company witnessed favorable momentum in the SME business lending as it managed to get numerous deals in regard to the hospitality, manufacturing as well as in the healthcare space.
Let us now study a bit about the operating expenses. The company’s operating expenses witnessed a rise on the back of new staff costs and extraordinary expenses incurred during the period. As per the presentation, in the previous twelve months, new business loan book witnessed the rise of 25%. The robust momentum was witnessed in the SME lending and Residential Mortgages as well as in the LeaseTech equipment financing and other leasing. The presentation also contained information related to the important sectors in which robust momentum was encountered. These sectors were Technology/IT services, expansion of retail franchise as well as hospitality and manufacturing.
The company stated that the total loan book happens to be in a decent position. The property development witnessed a reduction which got offset by the new business loans. We would now have a look at the balance sheet of the company. FE Investments Group ended September 2018 with total assets amounting to $63 million. As per the presentation, the company ended September 2018 with the deposit balances amounting to ~$51 million. At the end of September 30, 2018, the loans/deposit ratio of FEI Investments Group stood at 1.02x while at the end of September 2017, it was 0.85x.
However, at the end of September 2018, the company’s capital adequacy ratio stood at 9.30%. The management of the company stated that in Australia there happen to be decent opportunities in regard to the lending. Also, the company had rolled out Australian Online Platform which would be focused on lending as well as deposits.
The last traded price of the FE Investments Group Limited was A$0.115 per share. The company has been delivering strong returns lately. Over the past three months, the company has delivered the return of 41.98% while in the past one month, the stock has generated 43.75%. However, in the past five days, FE Investments have generated the return of 9.52%.
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