Nicholas Financial Earns 46 Cents Per Share

NICK just reported great fiscal Q2 earnings of 46 cents per share which was at the top of the range I gave yesterday. That’s a 39% increase over last year. For the first half of their fiscal year, NICK has made 90 cents per share. The company also said that it will pay another 10-cent dividend.

My earlier forecast was that NICK could make as much as $1.70 per share for this calendar year. That must have seemed very optimistic when I made it but now it looks very doable. In fact, I think NICK can make $1.75 per share.

This was an outstanding quarter. Let’s dig through some of the important numbers. Total receivables are up to $272.8 million which is a little lighter than I expected.

The gross yield came in at 25.21% which is the highest in a year. The two bites we take out of gross yield are interest expense which was just 1.81%, the lowest on my records, and provision for credit losses which was a measly 0.26%. That line can be the earnings killer. This means that NICK’s portfolio is doing well.

After those two are subtracted, the end result is the net yield which came in at 23.14%. That’s an increase of nearly 10% from three years ago. Out of that, we take 9.85% for costs and that gives us a pre-tax yield of 13.29%. That’s very, very good.

Here’s a NICKs Stats with some of the performance stats for the past several quarters.

Nicholas Financial, Inc. that for the three months ended September 30, 2011 net earnings increased 39% to $5,520,000 as compared to $3,982,000 for the three months ended September 30, 2010. Per share diluted net earnings increased 35% to $0.46 as compared to $0.34 for the three months ended September 30, 2010. Revenue increased 9% to $17,211,000 for the three months ended September 30, 2011 as compared to $15,732,000 for the three months ended September 30, 2010.

For the six months ended September 30, 2011 net earnings increased 43% to $10,823,000 as compared to $7,558,000 for the six months ended September 30, 2010. Per share diluted net earnings increased 41% to $0.90 as compared to $0.64 for the six months ended September 30, 2010. Revenue increased 10% to $33,845,000 for the six months ended September 30, 2011 as compared to $30,684,000 for the six months ended September 30, 2010.

“Our strong growth in earnings per share for the three and six months ended September 30, 2011 were primarily the results of an increase in the average finance receivables and a reduction in the net charge-off rate,” stated Peter L. Vosotas, Chairman and CEO. We also recently opened our 58th branch location in Huntsville, AL and continue to develop additional markets. We expect to open between 2-4 new branch locations during the remainder of our current fiscal year, which ends March 31, 2012.

As a result of our continued earnings growth and stable capital position, the Board of Directors has voted to continue issuing a quarterly dividend equal to $.10 per common share, to be paid on December 20th to shareholders of record as of December 13th.

Posted by on October 27th, 2011 at 10:45 am


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