Impact of Software Asset Divestments on Capital and Business Focus
Divestitures are expected to be accretive, allowing greater capital allocation to high-growth, profitable segments.
Proceeds from sales will be used in line with the company's capital framework, with potential return to shareholders if no immediate growth opportunities are identified.
The sale of software assets significantly reduces revenue contribution from 8% to a smaller proportion, enabling a sharper strategic focus on financial services.
Impact of Tax Legislation and Bonus Depreciation on Customer Spending and Loan Growth
Management highlighted that the passage of the big tax bill and extension of 2017 tax policies provide certainty, positively influencing customer sentiment.
Bonus depreciation is expected to boost activity, especially in sectors like heavy equipment and construction, with increased inquiries and activity.
Consumers are managing liquidity well, with no signs of deterioration, but are spending more cautiously due to volatility and uncertainty.
Strategic Focus on Scaling and Capital Deployment in Global Pawn Markets
EZCORP emphasizes its primary strategy of scaling store footprint and profit, with a focus on disciplined acquisitions and de novo store growth.
The company has a robust acquisition pipeline, especially in Mexico, Latin America, and potential new markets like India and the Philippines.
Management highlights the need for substantial capital to match the large global opportunity, indicating a preference for growth over share buybacks.
Recent financing has strengthened their balance sheet, enabling aggressive expansion and acquisitions, with plans to deploy significantly more capital in the next 12-18 months.
Dafinchi