Q1 2022 CURO Group Holdings Corp Earnings Call
Good day and welcome to be Churro Holdings first quarter 2022 conference call all participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.
To ask a question you May press Star then one on a touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to commercial Curios Chief Accounting Officer. Please go ahead. Thank you and good afternoon, everyone. After the market closed today Gerald obesity.
Results for the first quarter 2022 which are available on the investors section of our website at IR Dot Dot Com with me on today's call are charged Chief Executive Officer, Don Gayheart, and Chief Financial Officer, Roger Dean.
Before I turn the call over to John I'd like to note that today's discussion will contain forward looking statements based on the business environment as we currently see it as such it does include certain risks and uncertainties.
Please refer to our press release issued this afternoon and our forms 10-K and 10-Q for more information on the specific risk factors that could cause our actual results to differ materially from the projections described in today's discussion.
Any forward looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update or revise these statements as a result of new information or future events.
In addition to U S. GAAP reporting we report certain financial measures that do not conform to generally accepted accounting principles. We believe these non-GAAP measures enhance the understanding of our performance.
Reconciliations between these GAAP and non-GAAP measures are included in the tables found in today's press release.
Before we begin I'd like to remind you that we have provided a supplemental investor presentation that we will reference in our remarks and that you can find it in the events and presentations section of our IR website.
With that I would like to turn the call over to Don.
Thank you Tamara and good afternoon, everyone and thank you for joining us Tonight.
I'll start with something we haven't been able to say since the fourth quarter of 2000 My true this quarter seemed more normal voices tremendous long term growth and value creation opportunities from our strategic repositioning apparel.
Our loan book more than doubled versus the same quarter, a year ago, partly because we acquired heights and the fourth quarter of last year, which added approximately $470 million it was but unpacking the year over year loan growth at the business level.
Flexing he was up 169% kind of a direct lending was up 30% legacy Stewart wondering excluding the run off portfolios was up 34%.
And consolidated loan balances were up a very healthy five 2% sequentially with Canada growing in the U S impacted by the Q1 tax refund season tax season came in mostly in line with our internal forecast as we expected slightly smaller refunds than in years past due to the taxability of certain pandemic related benefits.
Smaller refunds reduced our collection rates are modestly but of course led to a smaller reduction in loan balances than in years past.
You should also know the heights customers, who have a higher income and credit scores are much less likely to receive tax refunds in particular larger earned income tax credits as a reminder, tax refund season, there's not a phenomenon that we or our customers see in Canada.
Of course with this growth comes upfront normal loan loss provision, we pointed out in our release and at the top chart on page four of our Investor presentation that normal loss provisioning this quarter compared to government stimulus impacted provisioning in the first quarter of 2021 produced a $28 $7 million pretax earnings square in Europe .
For Europe .
Including additional charge offs and provision detail for each of our business units.
Roger will cover the numbers in more detail later.
You'll see on slide eight of our Investor presentation that we revised our 2022 and 'twenty three outlook for our Canadian businesses.
It's important to note that the river.
Bodies outlook reflects updated at a high level thinking on the macro environment and recent trends most of your more cautious view of revenue growth and net charge off levels expanding on this a bit.
Can you us and Canadian economies are performing fairly well right now with job and income growth. However, both central banks are increasing base rates at meaningful quotes in an effort to tamp down inflation and engineered a soft landing.
We expect rising inflation and interest rates will impact, our consumer spending and borrowing habits, but to what degree remains unknown as we were facing a set of converging factors typically when we see rising inflation, coupled with positive employment trends. This is a sweet spot for our business, where we see good day, Maryland with good credit performance the unknown.
Doctor facing listener is if the U S and Canadian economies and.
The recessions.
And we start to see job growth slow.
What do you forecast that increase the probability of recession in late 'twenty. Two 'twenty three so this has caused us to temper some of our top line and credit performance expectations.
Also rates are rising and it's far too early to tell where the fed and the bank of Canada and up on the benchmark rates.
The current forward rate curve switches steepen meaningfully in the past smart when you see an impact of approximately $8 million in 2000 $20 million to $15 million in 2023.
Put another way each 25 basis point increase in the benchmark rates result in about $2 $5 million of additional annual interest expense using current debt balances.
A reminder, here that our current debt balance is approximately 50% consists of fixed rate senior notes and the rest is variable rate asset back to salaries in the U S and Canada.
With respect to our flexi business, we're very pleased with the work being done by our whole team in Toronto to scale and support our businesses tripling this year over year rate of originations, but overall retail sales in Canada have seen some softening as well as a shift from larger ticket part in white goods, which reflects these primary channels to apparel and cause.
Metrics as well as a further shift to travel dining and other service based expenditures.
Finally, I should note that we share some of the optimism that's being expressed in some of the earnings reports about the overall health of consumer balance sheets and wage gains is driving more loans in there.
In our view a bit more of a balanced approach has called for it we tried to reflect that in our revised outlook I continue to remain confident in our outlook given the strength of our businesses.
And focus on disciplined long term execution and prudent credit management.
I'll now turn the call over to Roger to review the details for our first quarter 2022 results.
Thanks, Don and good afternoon, adjusted net income for the quarter was $6 $3 million or 15 cents adjusted diluted earnings per share compared to 69 cents.
Adjusted diluted earnings per share in the first quarter of 2021.
The primary driver of the year over year decline in earnings was stimulus impacted compared to normalized loss provisioning that Don mentioned earlier.
Interest cost was also higher by $18 $8 million because of the senior notes tack on that we did in the fourth quarter to finance in part the acquisition of Heights, and higher utilization of nonrecourse asset back facilities to support loan growth, including the related facility assumed in the hype cycle.
Susan.
Total revenues in the first quarter increased $94 million or 48% year over year.
<unk> added 66 million of revenue and we also had a full quarter of Canada point of sale bonding, which contributed $20 million of revenue this first quarter compared to $1 $6 million and a partial quarter of the first quarter of 2021.
Canada direct lending revenue rose, 22% year over year.
And U S direct lending, excluding the runoff portfolios and excluding heights grew 12% versus the first quarter of last year.
Our U S run off portfolios.
If you'll recall those portfolios are comprised of California, and Illinois installment loans, Virginia opened in light of credit and verge.
Both contributed $6 4 million of net revenue in the first quarter compared to $14 million of net revenue in the first quarter of 2021.
Consolidated operating expenses for the quarter increased $46 2 million.
Our 43, 1% compared to the prior year driven entirely by the expense space that we acquired with Heights that was $33 8 million.
A full quarter of flexing your this year, adding $15 5 million.
Excluding the lack of year over year comparability for the heights, and flexi acquisitions operating expenses were flat.
As cost savings from store closures in the middle of last year offset normal growth in variable costs and compensation.
Sequentially recurring operating expenses, excluding hike decreased by $4 million.
Don already covered loan growth by business, So I'll talk a little more about credit quality.
Our credit metric trends of Q1 were consistent with what many of our peers have seen overall.
Continuing trends towards normalization, but.
But still favorable to pre pandemic run rates.
Our consolidated quarterly net charge off rate for the first quarter improved year over year.
90 basis points from portfolio mix shift to lower loss rate products.
Looking at it by business.
U S net charge off rates improved 150 basis points year over year, well pass through rates increased by 90 basis points to a year ago.
Sequentially U S net charge off and pass through rates also improved meaningfully.
Both comparisons are affected by our hikes acquisition at the end of December .
So if we take heights out of the numbers.
Net charge off rates were 440 basis points higher year over year, while past due rates were 240 basis points higher but.
Chile U S. Net charge off rates were down 380 basis points and the pass through rate was down 30 basis points.
Canada direct lending net charge off ratio increased 170 basis points and the pass through rate was up 160 basis points compared to Q1 of last year.
We saw more normal post holiday seasonality and the Canadian direct lending portfolio in the middle of Q1, but as we've moved through Q2, so far we've seen delinquencies trend back down comfortably.
For Canada point of sale, which had very stable and consistent net charge offs and pass through rate trends over the past three quarters.
We had $60 2 million in unrestricted cash and $118 million of additional liquidity, including undrawn capacity on revolving credit facilities and borrowing base levels.
March 31 2022.
We are currently working on a very attractive refinancing and expansion of heights nonrecourse asset backed warehouse facility.
And accessing asset backed securitization for that business in the second half of 2022.
We also announced earlier this quarter that we expanded the capacity under our Canadian SPV facility.
50 million Canadian dollars.
Finally during the quarter, we repurchased just over 824000 shares and the board authorized a quarterly dividend of 11 cents per share.
This concludes our prepared remarks, and we'll now ask the operator to begin Q&A.
Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
If youre using a speakerphone. Please pick here please pick up your handset before pressing the keys.
If at any time. Your question has been addressed and we would like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Our first question will come from John Hecht with Jefferies. Please go ahead.
Afternoon, guys and thanks for taking my questions first one is just Raj.
Roger you did mention you did.
From an expense perspective, not a lot of comps just given some of the new.
Divisions, you guys have bought and are growing.
E is this a good kind of base case for expenses and then any comments on what kind of inflation or just sort of growth expectations with respect to expenses this year.
Roger.
Alright, sorry, forgive forgive me I was I was on mute sorry about that no I think John I think Q1 was a pretty good a pretty good a pocket, but a pretty good run rate for the from a quarterly perspective perspective, there wasn't anything if you take the recurring expenses, which are reconciled it back in the supplement in the appendix of the duck.
Flexing expenses were a little lower than they were.
Total expenses were down sequentially, if you take hikes out I'll come back to heights in a minute, but if you take hikes out our total expenses were down sequentially from Q4 that is largely.
Barry that's largely variable compensation.
We did have we did overachieve our plan that's all the proxy and so we had some back loaded.
A little bit more variable compensation expense in the fourth quarter than the normal run rate.
Couple of other things and by the way fluctuates seasonally are flexing as expenses in the fourth quarter to support the holiday season or are a little higher than they would be in the first quarter. So if you look at our numbers I think I I think I said, excluding heights, the expenses were down 4 million sequentially.
But if you kind of establish that as the run rate ex Heights, and then heights was about 33 $34 million and I think theres going be some.
That's.
The highest numbers not it's certainly not going to go up materially.
And you know there are some there's continued we will be working through some combined cost synergies are there that we've got like I said you know we've only owned them since the end of December so.
We're on our way, but not all the way there. So so overall again.
I think that I think Q4 or Q Q1's, a good you know a good run rate proxy for the quarterly for the rest of this year.
Okay. That's helpful. And then I mean, you know with Heights and you know some of the new stuff you guys have bought in Canada, you've got a number of different <unk>.
Sales to grow in and you know customer acquisition channels I'm wondering can you comment on customer acquisition specifically.
And customer acquisition costs and methods of customer acquisition, and so forth and any channels that are growing at different paces are more attractive than you would've expected.
Yeah, Yeah I.
I think well obviously in some of the new stuff.
We have flexibility as the merchant base.
Relationship listen, but we do we do.
You'll get some traffic.
To fussy Dot com.
And as we particularly as we rolled out and ramp up.
Our relationship with them.
As a reminder for venue.
One just some furniture retailer.
In Canada, we've been featuring.
A lot of them there.
Advertising.
Both print and online we've been able to get some some traffic plus you dot com.
Directly and.
And we have some we're testing ways to.
To grow that we've got a good team up there a good marketing tool with some good digital experience so.
But I think the.
The main focus of that business continues to be just just ramping up and rolling out the regional relationships. We've added them it was about somewhere probably.
Up about about tripled their origination volume year over year in the first quarter. There. So that's really the main focus although we are starting to put some more money in some more.
Energy and effort into the called the direct to consumer and complexity of Dot Com online Brown.
Hi.
Hum.
The retail business I think most people will there'll be either.
Shopping filter applications online, calling the branches so.
It's really not a walk in business per se, but most of them.
That system sort of a certain kind of a pizza and watch them most of the loan transactions there on our branch business loans.
We are.
We have some some some work to do before we can sort of fully.
Take advantage of some of the digital capabilities that we have in sort of I guess, just kind of sharing those but with heightened and certainly as we're looking we're working on.
Some some centralized collections items some more.
More centralized underwriting and then.
And each of them to their digital capabilities.
Up to and including you know in the you know in our.
I'm not too distributional chunk would be able to close certain kinds of loan transactions completely online like we do on the legacy.
Hum.
Our U S direct lending business, but okay sums of money being spent on Idaho laxity height. It's a little early I think it's much more sort of planning and development to make sure that we can kind of get it right. When we know when we when we do well in it and one other thing I would just just mentioned as well as one of the exciting parts about both of those.
So there's certainly some of the high cost of London.
Channels are limited.
Yeah, it's Google or uncertainty of whether you can put your apps et cetera.
And flexible.
And as a result, the loan portfolio and the products that height or.
We're not growing by those same kind of restrictions. So we're kind of excited to be.
And as we grow those to be able to use it.
A wider variety of channels and we've been able to use them.
The legacy direct lending business.
Great I appreciate all the detail thanks.
Our next question will come from John Rowan with Janney. Please go ahead.
Hey, guys.
Don I just wanted to kind of go over you know some.
Some of the guidance that you had previously provided.
Specifically, the $3 plus whatever number was for guidance for Heights previously I mean.
Are you backing away from that or is that still a target for 2023.
Want to understand how youre looking at that you know that the 2023 number with everything in it.
Yeah. So we're certainly but we're I guess, we didn't really.
The address our revised outlook for heights, So we certainly are affirming.
Herman.
The outlook that we gave her heightened when we.
When we.
Once that deal closes up you know with the summer. So we tried different documents.
And the 55 million of pretax I think go into 75 to 76 in 2023 so.
We feel good about where heightened.
And then I'm still we still have the reminder, we told level just because of the well.
Hum.
The difficulty in forecasting the legacy U S direct lending business coming out of the pandemic.
You said the top or at the top of the call. It feels like we're getting more normal numbers now.
No more kind of quarter.
Exactly how that business comes back I think.
In light of what is you know some some more uncertain economic times, we're still.
My parents were to give an outlook on that business.
We did.
Reducer, maybe direct lending business is a little bit for the direct lending business a bit for a.
A little bit of higher credit costs as well as just interest expense increases.
With the.
With the forward curve has gone up so much in Canada and the U S.
By about the same.
Looking out it's kind of you know.
225, 50 basis points, so and then on the.
The flexing side, we just looked at.
Talk about the last call you on the scale volumes.
I've been running a little bit behind where we'd like and that's just retail in general and candidates people spend more money on.
Dining out and travel et cetera.
The bedroom sets in furniture et cetera.
And then.
While the credit credit quality remains excellent there you can see it in our earnings release.
And it's still running at around 50 basis points, a quarter and charge offs, there, but that means a huge screen fewer accounts enrolling to interest bearing so typically going to 90 days same as cash in that role is that interesting.
A catalyst and a few of those warrants have been paid off earlier.
Benefits credit losses.
It hurts us a bit on the top line yield so.
No I think that if you look at that if you roll those numbers out for 'twenty three.
$3 number.
Hands on on where the U S legacy business.
And how that business tends to perform at that number certainly we think absolutely ideal for us and.
93 <unk>.
Assuming we get out there.
Somewhat normal kind of kind of.
Return to loan volumes and in credit in the U S, which I think the first quarter was a pretty good down payment on that.
So obviously you know well.
Well, we have guidance for.
Canada right, we have you're standing by your guidance for Heights.
The wildcard is always been and this is not nothing new what happens in the U S.
Do you feel about the U S. Right. There was a relatively modest segment operating loss for the quarter, if I'm reading the supplemental correct.
If I'm not mistaken I believe in the last few quarters or was it was a bigger number. So maybe just give us an idea of the trajectory in the U S and you know whether or not you know what it's going to take to turn that business profitable.
So yes.
You can see the.
And you can see the provision impact in that business on page four.
For all of the businesses on page four.
Hum.
But again, it's it's Roger.
We have the operating numbers, but does that include the bonds or something it was fully burdened by the yeah yeah.
Yeah.
Yeah in all periods. So obviously the interest expense for that.
It was on that that business, but and it went up so we had a meaningful improvement of course.
Obviously sequentially from Q4.
And the and the pre tax and the EBITDA for the U S legacy business, but you know I think.
I think it's.
Pretty much what we've talked about which is I think we've said because of the provision of a year over year provisioning and you saw a big chunk about this quarter.
With allowance release in provision being a credit or a tailwind in Q1 of last year I had one this year.
That's that's going to that that that delta year over year in the second half of the year kind of normalizes.
But you know that the business will continue to make you know a little more money each I think each quarter, but but it's never you know like for like the 22. We said we set a number of times 22 will never approach 21, but if assuming that we could grow the loans and get the provision you know.
Normalize and get a lot of the upfront provisioning behind US. Then then twenty-three should you know 23 should start to look.
Look normal again.
I'm trying to get just makes it I think one of the ways. We look at the business now as we take.
We take we take.
Sort of direct lending like you take the <unk>.
Heights business, Canada direct lending.
But the flex in the business and then the U S direct lending investment building out the burden of the interest expense that kind of sits at the holdco because we look at those businesses.
On financing facilities non recourse financing facility.
Deducting interest expenses those from their pre tax earnings.
From an internal work so if you add to it.
75 million of interest expense on the bonds back to the U S. A.
Segment, you can sort of see the level at which it is.
It's nothing but that.
The op business operation.
Operation arent profitable, but quite profitable consistent the way its presented the burden that is burdened with all of that interest expense.
Okay and is there any thanks for that.
Explanation.
Are you guys, providing any guidance for to give at this time.
Not yet not really no.
Alright, thank you.
Well thanks John .
Yeah.
Our next question will come from Bob Napoli with William Blair. Please go ahead.
Hi, This is spenser James on for Bob Napoli. Thank you for taking the question could you just remind us how.
Heights is positioned relative to how that business is positioned pre pandemic does your guidance for this year for heights imply.
It being ahead of where it was in 2019.
And then in that context, what are the drivers you're seeing for.
The revenue growth for heights into 'twenty three.
Yes. Thanks.
Good question, So no we absolutely see it being.
And again it was a it was.
The company, so hum, but now we see it well it had 20.
2021 for them was ahead of me.
Relatively consistent earnings growth even with.
A little bit about.
Pandemic related slowdown.
But remember this isn't Mrs.
A higher credit quality customer the small loan customer there and that book is gonna be.
Low six hundreds in the large loan customer was going to be 20 to 30 points higher there from a FICO perspective, so and as I mentioned not us.
There's not as much seasonal pay down with tax refunds et cetera. So it's a very different product in a very different customer than our.
Our legacy U S business, so they continue to see.
Good growth, earning assets.
For March of 'twenty to.
22 versus March of 'twenty, one when they were private.
We're up 23, 2% year over year.
It is not quite the same but the club some of it's mix shift to some of the larger lower yielding loans, but a very good performance in that business Hum and I think that where we are.
In the process of opening a number of branches, we're probably going to be in four new states by the end of year, we're trying to be yeah. Yeah, that's where all of this is I think everybody is kind of look at the macro.
And making sure that youre not.
Now in terms of volume and customers are being that we're being a little bit more measured than maybe we had been.
In the hall, just because we're looking at the macro.
But I think youre still going to see us opening branches and expanding into new states.
And again more emphasis and he said at the time to close the deal more emphasis on that larger loan product posted a smaller loan products, so larger loans and lower yields.
Longer terms and those products also again, just because of the pandemic they didn't see nearly as much.
So it's important for us to pay down the fastest or the smaller balance higher yielding products that we offer in our legacy business those paid down.
It's a linear relationship the lower price product the larger the loan the moment of term those had those experiences.
Pay down rates.
The height small loan mortgage loan business kind of maybe where it's a plot them when that same curve. They would share that same kind of behavior. So we haven't had to deal with they haven't given the same kind of pay downs that we did in the U S.
Okay that makes a lot of sense. Thank you.
So if I'm hearing you correctly, there's no changes to the plans to open our new stores in Ontario, and also our new branches for United States.
Is it the outlook or the same as it was last quarter.
Yeah, it's still the same yep Yep, that's our what are primarily either when direct brand.
I'm, sorry, Oh, and then the heightened brand.
Okay. Thank you and then I'll just sneak in one more quickly any comments on AR for the flag city business customers.
Customers propensity to run our revolving balance I know that some of those customers take longer to ramp up any change to.
Are you seeing customers are running a balanced versus paying it down more quickly.
Yes, it's working.
We're starting we're seeing gradual improvement.
But again.
Again, you can.
If you look at the we just plot that we gave you on page four at the very bottom right corner of page 12, we give you the charge off rate by segment you can see that.
Flexing.
<unk> gone in Texas, It's gone down even from Q2 of last year, which was a.
Pretty good pretty good.
From a credit quality standpoint, so the credit quality continues to get better there.
But that that's a function that's almost members won't get what we're talking about so we'd rather see.
On balance.
Obviously your annualize. It you know 50 basis point charge offs, we think charge offs Roderick overtime and that business, we'd like to see them, one kind of 4% to 5%.
I mean, some of that is going to be we're adding some some some near prime and subprime to the to the product mix there, but we think that that you know the.
Sort of and that's kind of a startup.
Look at that business over time, that's a more normalized charge off.
Pattern and we think that the business model works because you then add more.
Charge offs youre going to have a lot.
Have a proportionately larger amount of yield so you kind of net.
Net net.
Net margin after after credit provision it was going to just kind of go up so right now our margin while again, it's great to have you know 50 basis point charge offs.
And in a quarter.
Second consecutive quarter.
Over time, we'd like to see that slowed up some more of those balances flowed into.
In the revolving.
Non interest income in addition to the.
Tip to the merchant just kind of just as a quick reminder, the question of why this is so this is a private label card business and now with I guess, some some product similarities similarities it might wind up with with buy now pay later companies. This is probably not something you know.
Buy now pay later.
This is promotional.
The interest rate financing very typical 90 days same as cash part of maybe some of those cars.
Larger ticket purchases. So this is furniture appliances.
Our electronics. This is not 200 dollar break $200 of spend in the four payments or for kind of biweekly payments, that's a very different business than when they find out pay later models that are quite prevalent right now and we think very much liked more up with sort of a you know what.
What kind of what secreting GE monogram card business and.
And those those private label card businesses that kind of business model.
Thank you.
Again, if you have a question. Please press Star then one our next question will come from Moshe Orenbuch with Credit Suisse. Please go ahead.
Great. Thanks, most of my questions have been asked and answered, but maybe could you talk a little bit you know maybe in more detail about that.
The plans for growth in flex and Flex city.
Given the various things you've already talked about I think you made a small acquisition that kind of as you know kind of goes on that platform.
The portfolio and.
Obviously, there will be you know you'll be operating at a higher rate environment. So.
Does that have any implications.
From a competitive standpoint, just talk about that a little bit. Thanks.
Yeah, So we're going to get much in terms of if we did we did buy a portfolio as part of sort of onboarding.
Michael Hill, which is an Australian based jewelry chain operations and.
In Canada, we bought their existing.
Point of sale portfolio, I think it was 11 and $12 million Canadian.
And that's the strategy, we'll certainly if that's it that's what would a merchant when it's part of them in most cases, we tend to sort of transition you'll stop offering.
The financing relationship with.
With the incumbent lender it will introduce with Pepsi co.
Cogs, but this isn't just a different option too.
Retail is a little more liquidity apart and we're happy to.
So.
No I think we're our.
In Canadian dollar strategy, a couple of I think we just sort of passed.
About $700 million in Colombia in Outstandings are just just recently.
And I think by the end of the year that business will probably.
It was like almost certainly be a north of a billion.
And receivables and that's.
You know the biggest chunk of that is going to be the E. L. F. L. B.
Business that we added but some other other good sized merchants. It continues so we don't we have not.
For cat, which forecasts growth organic growth from existing merchant relationships, but we don't we haven't built into any of the numbers, we've talked about on flex and new merchants.
To feel like we're in a position.
Download.
At some point down the road.
To add some additional work that now whether it's going to be something of the scale of L. F. L X.
And it's probably unlikely just because it's.
The size of that.
The size of that business, but.
We look to the.
It's sort of annualized or get a phone I get sick.
Full year.
Uh huh.
<unk> contribution from <unk>.
The business, we have now and that's how we kind of get to that that business being a hum.
From a from a from a red standpoint.
Getting them to you now.
307.
2020 free so I think it's.
Hopefully there'll be there'll be some other stuff.
The caution, which as we add new relationships are generally going to be dilutive and the warrants were mostly just there's some expense mostly just revisiting exercise hum early on.
But.
That's a business that is at the end, but we think if we get to a billion in receivables we would be the fourth largest.
Our retail credit card originator in Canada.
I know one of them is kind of an entire up I can't remember if any others.
But because all of those cards or general purpose cards. So it's a mastercard visa where you can go get.
You get you can people can use the card for gas and groceries and have rewards features et cetera.
We would that would be the number one private label issuers. So our cartridges only works in their network one of the things we continue to sort of analog to think about it is it.
Does it make sense for us to to have or to turn our card into a general purpose card. So you can use your flex the clock with the Mastercard user use it for.
Purchases outside of the network. So there's a lot of cost considerations, but obviously it would be more volume.
Hum.
And Ah.
Is it done properly, it's a very cheap way to originate a general purpose card, which is what is the status.
Just pointing out there there's a lot of larger companies that have very big.
General purpose cards, they originate on our retail platform. So thats something were taken out.
Hard look at right now.
Great. Thanks very much.
Okay.
This concludes our question and answer session I would like to turn the conference back to Dan Gayheart for any closing remarks.
Great well thanks, everybody. We appreciate your joining us we look forward to talking to you again after our second quarter results. Thanks a lot.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.