Q4 2024 EZCORP Inc Earnings Call
Yeah.
Speaker Change: Good morning, ladies and gentlemen, and welcome to the easy Corp fiscal fourth quarter and full year 2024 earnings call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time as a reminder, this call may be recorded I would now like to turn the conference over to Sean Mansouri, The company's Investor Relations adviser with elevate IR. Please go ahead Sean.
Speaker Change: Thank you and good morning, everyone. During our prepared remarks, we will refer to slides, which are available for viewing or download from our website at investors <unk> easy Corp Dot com.
Speaker Change: Before we begin I'd like to remind everyone that this conference call as well as the presentation slides contain certain forward looking statements regarding the company's expected operating and financial performance for future periods.
Speaker Change: These statements are based on the Companys current expectations.
Speaker Change: Actual results for future periods may differ materially from those expressed due to a number of risks or other factors that are discussed in our annual quarterly and other reports filed with the Securities and Exchange Commission.
Speaker Change: And as noted in our presentation materials and unless otherwise identified results are presented on an adjusted basis to remove the effect of foreign currency fluctuations and other discrete items.
Speaker Change: Joining us on the call today are easy Corp's, Chief Executive Officer, Lockheed given and Tim Guttman Chief Financial Officer.
Speaker Change: Now I'll turn the call over to Lockheed.
Lockheed Given: Thanks, Sean and good morning, everyone.
Lockheed Given: Today I'd like to begin with a review of our fiscal fourth quarter and 2024 before them and then move to an overview of the progress we've made it up on our strategic goals, we set four years ago.
Lockheed Given: We're excited to report a record breaking fiscal Q4 and full year 2024, driven by our teams consistent execution of our strategic plan.
Total revenue for Q4 rates to record 340.
$9 million up 11% year over year, while PLO grew 14% to $179 2 million the highest level in our history.
Lockheed Given: We also delivered strong bottom line results in Q4, with EBITDAR up 15% to $36 7 million and diluted EPS climbed 13%.
Speaker Change: I appreciate it.
Speaker Change: These outstanding operating and financial results demonstrate our commitment to delivering value for our stakeholders.
Speaker Change: Beginning on slide three we continued to be a global leader in Poland, Broking, and pre owned and recycled retail.
Speaker Change: We operate 279 doors in the U S and Latin America, having added another 21 stores this quarter.
Speaker Change: Demand for our Pawnbroking services continues to grow.
Speaker Change: Economic pressure from elevated living costs and limited credit options drive customers into short term test solution.
Speaker Change: Additionally, consumers are becoming increasingly value conscious turning to pre owned merchandise for affordability and eco friendly benefit.
Speaker Change: We are continuously innovating and providing exceptional customer service to address the evolving needs.
Speaker Change: Moving to slide four.
Speaker Change: During the quarter, we opened 20, new stores across Latin America, and acquired an additional store in the U S.
Speaker Change: Our earning assets grew 16% year over year reporting a record PLO balance and leading to a 12% increase in Psa.
Our cash balance declined to $171 million.
Speaker Change: Paying off that convertible note during the quarter, along with an increase in PLO and inventory as well as share repurchases of $3 million.
Speaker Change: We maintain substantial liquidity the bond PLO growth expand de novo.
Speaker Change: The inorganic growth opportunity address near term debt maturity and share repurchasing.
Slide five shows the continued growth of our business across all key financial metrics in Q4 as well as throughout the year.
Speaker Change: Q4 revenues grew 11% year over year merchandise sales increased 9% and gross profit grew by 12%.
Speaker Change: While EBITDA and diluted EPS declined, 15% and 13% respectively.
Speaker Change: As noted earlier strong consumer demand and exceptional customer service.
Speaker Change: You need a fuel PLO and PSC growth.
Speaker Change: Now turning to our key business strategy highlights for Q4, which are on slide six.
Speaker Change: We are proud of the progress we've made in strengthening our core Paul operation.
Speaker Change: In the U S revenue continued to grow due to our ongoing focus on development for our team members, serving our customers and executing on coal fundamentals.
Speaker Change: In Latin America gross profit grew by 20% due to enhancements and automated pricing loan guidance and focus on customer data.
Speaker Change: Additionally, we continue to encourage store systems and processes to increase speeds.
Our focus on strengthening customer relationships is evident in the 44% growth of 80, plus reward members, reaching $5 4 million members globally.
Speaker Change: We also captured a increase of 23% and traffic to our core <expletive> website.
Speaker Change: These metrics reflect that deepening connections with our customer base and our ability to engage across multiple platforms.
Speaker Change: We remain committed to fostering a culture that empowers and recognize that that team members who are truly the foundation of our success.
Speaker Change: In Latin America, we've improved scheduling processes to support a healthy work life balance.
Speaker Change: Additionally, we launched comprehensive training on the fiscal 2025 incentive program structure, ensuring team members fully understand earning potential and performance criteria.
Speaker Change: To support long term growth with also enhance that talent and succession planning tool equipping easy coop to better identify develop and retain top talent.
Speaker Change: Turning to innovation and growth.
Speaker Change: <unk> online payment collections increased $6 $2 million in the quarter.
Speaker Change: In Mexico adoption of online payment also growth with 13% of extensions and layaway now handled online.
Speaker Change: Additionally, Matt Pauls luxury E Commerce sales grew sixfold, primarily through EBIT.
Speaker Change: With that I'll hand, the call over to Tim Johnson, our CFO, who will provide a deeper look at our financial results.
Speaker Change: Okay.
Tim Johnson: Thanks Lucky.
Speaker Change: Slide eight provides a detailed look at our consolidated financial results for fiscal fourth quarter.
Speaker Change: As <unk> mentioned, we closed the quarter with a record low of $279 2, million% to 14% increase year over year.
Speaker Change: <unk> revenue rose, 12% year over year, primarily fueled by same store PLO growth.
Speaker Change: Our inventory turnover rate was two six times with HTM inventory at one 7%.
Speaker Change: Merchandize increased by 9% to $165 $5 million, while merchandize gross profit grew by 8% from the prior year period.
Speaker Change: The company posted another strong quarter of profitability with EBITDA, increasing to $36 7 million.
Representing a 15% increase from the prior year period.
Speaker Change: This growth was primarily driven by higher <unk>, partially offset by a 10% increase in expenses.
Speaker Change: Moving to our U S pawn segment on slide nine we achieved record fourth quarter U S revenue of $212 million up 9% year over year.
Speaker Change: Assets grew by 10% driven by an increase both in PLO and inventory.
Speaker Change: Slide 10 includes a map of the U S States, where we operate hauling out robust footprint of 542 stores.
Speaker Change: FY 'twenty four average U S land size increased by 9% supported by a 60 basis point rise in PLO jewelry competition as we benefited from rising gold prices.
Speaker Change: Additionally, general merchandise inventory compensation rates by 20 basis points, driven by sporting goods electronics until.
Speaker Change: Slide 11 provides a more detailed view.
Speaker Change: Financial performance in the U S.
<unk> grew 12% on a total and same store basis due to improved operational performance and continued.
Speaker Change: On the U S retail merchandise sales increased by 7%, while <unk> gross profit rise by 4%.
Speaker Change: The lower growth.
Speaker Change: And reflects our focus on inventory turnover.
U S pawn EBITDA for the quarter was $43 $6 million up 10%, primarily due to higher AUC, partially offset by a 10% increase in U S expenses.
Speaker Change: Uhm EBITDA margin improved by 24 basis points to 21% underscoring our focus on profitability.
Speaker Change: Turning to our Latin American corn segment on slide 12.
Speaker Change: Total revenues increased 17% to $88 9 million.
Speaker Change: Which was a record high for the fiscal fourth quarter.
Speaker Change: Owning assets increased 33% driven by PLO increase of I think an inventory increase of 56%.
The increase in inventory is driven by a number of factors, including high PLO and lower than normal inventory in the prior year quarter in which we reduced aged general merchandise.
Speaker Change: The holiday period during our first quarter provides a great opportunity to increase out to lower inventory growth.
Speaker Change: On Slide 13, you can see that we expanded our presence in Latin America, and now have 737 stores opening 20, new locations across three countries during the quarter.
Speaker Change: Hello, jewelry competition increased by 400 basis points, reflecting our strategic focus on growing this category, particularly in Mexico.
Speaker Change: The high jewelry PLO composition, all that contributes to a 10% increase in average loan size for the year.
Speaker Change: At 7% on a constant currency basis.
Speaker Change: As I mentioned, our Latin American region saw significant PLO growth of 18%.
Speaker Change: As highlighted on slide 14, primarily fueled by our team's strong operational performance and increased corn demand in the area.
Speaker Change: <unk> rose by 19% driven by same store PLO growth.
Speaker Change: On the retail side merchandise sales grew by 14% and merchandise gross profit increased by 19%, reflecting a 200 basis point margin expansion.
Speaker Change: EBITDA climbed an impressive 50% to $12 7 million with EBITDA margin, reaching 14% up 312 basis points.
Speaker Change: The EBITDA improvement was due to higher PUC, partially offset by a 10% increase in expenses.
Speaker Change: As we often do at fiscal year end, we would like to take this opportunity to highlight how we have performed against this multi year strategy and longer term goals. We introduced at the end of fiscal 2020.
Speaker Change: I will now pass over to Lucky to review our execution.
Lucky: Thanks, Tim.
Lucky: Slide 16 highlights our strategic progress over the last four years.
Lucky: In fiscal 2020, we transitioned to a seasoned leadership team largely promoted from within.
Lucky: Experience in the pawn business.
Lucky: This team initiated a comprehensive review across all function, leading to a new multi year plan focused on cultural and ultimate team development and optimizing our coal port operation.
Lucky: We aim to improve lending model increase inventory turnover and reduce cost and expand both our customer base and store footprint, all while prioritizing exceptional customer service.
These efforts have driven substantial growth on the top and bottom line along with strong returns on capital for our shareholders.
Lucky: On slide 17.
Lucky: <unk> to our core values.
People call and passion has resulted in record breaking PLO and revenue growth along with strong Roe.
Lucky: We launched a cultural transformation in the U S in financial year, 2000, and in Latin America by financial year 2022.
Lucky: The outcome of these efforts is visible not only in our improved financial and operating metrics, but also in our latest company wide engagement.
Lucky: Growing an impressive 84 point significantly above global benchmark.
Lucky: On Slide 18, you can see how the execution of our strategy over the last four years has led to material improvement in profitability and shareholder value.
Lucky: Net income is up nearly four times since fiscal 2020, and EBITDA has more than doubled with the share price increasing 123% during the four year period significantly outperforming both the Russell 2000, and S&P 500.
Tim Johnson: Tim will now detail other substantial financial improvements we've achieved over the last few years.
Tim Johnson: Thanks Rocky.
Speaker Change: Over the past four years, we've had substantial improvement.
Speaker Change: The result.
Speaker Change: Starting with PLO on Slide 19, we reached a low in fiscal 2020 due to Covid impact.
Speaker Change: <unk> has rebounded strongly.
At the end of fiscal 2024, PLO hit an all time high while PSC increased to $434 million for the fiscal full year.
Speaker Change: Jewelry pawn demand growing faster than general merchandise has contributed to a high average line size and based on current gold prices. We expect continued growth in this key category.
Speaker Change: On slide 20.
Speaker Change: You'll see our progress to more effectively manage inventory.
Speaker Change: Despite the increase in inventory driven by our focus on PLO image returns remained strong at three eight times.
Speaker Change: <unk> sits at one 7%.
Speaker Change: Worth, noting that excluding luxury handbag now three Max pawn stores in Las Vegas.
Speaker Change: <unk> general merchandise remains under 1% of title GM inventory in fiscal 2024.
Speaker Change: Slide 21 highlights record merchandise sales and gross profit in fiscal 2024, reflecting the improvements made to our operating model over the last four years.
Speaker Change: <unk> gross profit increased to $234 million in fiscal 2024, reflecting a 9% CAGR since 2020, while our merchandize margin off the baking in FY 'twenty. One is now stabilized within our target range at 36%.
Speaker Change: Turning to slide 22, we achieved sustained growth in customer engagement driven by our <unk> rewards program.
Speaker Change: Which has led to market share gains and improved customer service efficiency.
Speaker Change: Easy plus rewards members surpassed 5 million at the end of fiscal 2024, and those members accounted for 77% of all transactions for the year.
Speaker Change: We also continue to drive strong growth across a number of key metrics, including online extensions and likewise as well as cumulative reviews, which are highlighted on this slide.
Speaker Change: Moving to slide 23.
Speaker Change: Fiscal 2020, we've added 274 stores with 168 of those stores added through acquisition and 131 for.
Speaker Change: While consolidating 24 locations that did not meet output growth and profitability thresholds.
We've also entered the luxury segment since that time with IMAX pawn stores in Las Vegas.
Our strong balance sheet underpins these growth initiatives with $249 million invested in earning assets and $71 million in strategic assets.
Speaker Change: Since August 2022.
Purchased three 4 million shares of $31 million and extended over 68% of our debt maturity to fiscal 2029, maintaining a favorable long term cash cost of 375%.
Speaker Change: For U S corn in China on Slide 24, PLO has more than doubled from fiscal 2020 with PLO per store up 87%.
Speaker Change: Gross profit increased by 39% EBITDA by 75%.
Speaker Change: <unk> has reached 156% at the end of fiscal 2024.
Speaker Change: Turning to our Latin American segment highlights on slide 25.
Speaker Change: In Latin America is up 160 in fiscal 2020 with PLO per store up 76%.
EBITDA has increased an impressive 150% since fiscal 2020, and EBITDA margin is up 400 basis points to 14% during the same period.
Speaker Change: <unk> is in.
Speaker Change: In fiscal 2020, with 127% and is now a 175% driven by our team's focus on customer and operational improvements.
Speaker Change: Turning to slide 26 on our strategic investments.
Speaker Change: Our investments in cash converters International IMG through pound has represented a significant strategic and geographic expansion of our core corn operation.
Speaker Change: <unk> found as we've got an increased exposure to key regions like the Caribbean Central America at Florida.
Speaker Change: With cash converters international lifted on these trailing stock exchange, we've expanded our presence across 14 countries, including Australia, and New Zealand and the U K.
Speaker Change: We are highly optimistic about the growth prospects of these two well managed businesses.
Speaker Change: Since fiscal 2021, we have invested $10 $7 million to increase our ownership from 34, 8% to 43, 7% and we received $12 $3 million in dividends.
Speaker Change: Including $1 $8 million in a private 2024.
Speaker Change: On the ESG front on slide 27, we remain focused on contributed to a circular economy by providing environmentally friendly retail experiences to our customers through a network of neighborhood re commerce doors.
Speaker Change: In fiscal 2024, we sold five 2 million pre owned general merchandize and jewelry items group co.
Speaker Change: <unk> and purchases from customers extending the useful life of these products.
Speaker Change: We were also recognized by Newsweek, a work life diversity during fiscal year and remain very active with our charitable contributions and community engagement.
A quick word on our capital stack and allocation priorities.
Speaker Change: We continue to have a robust liquidity position with $171 million of cash and $333 million of growth convertible notes on our balance sheet at September 32024.
Speaker Change: We believe the most effective uses of cash to drive shareholder value is to use a balanced approach, which includes reinvestment in our business to drive organic growth.
Speaker Change: Acquisitions share buybacks and debt repayment.
Speaker Change: As long as he mentioned earlier, our 2024 notes were retired in early July.
Speaker Change: We have $103 million of convertible notes that come due in May 2025, and we continue to explore several options to refinance that note, including by use of existing cash traditional debt or other equity linked instruments.
Speaker Change: Looking ahead, we expect to continue driving organic growth on both the top and bottom line by a combination of increasing PLO and PSC as well as merchandise sales growth.
Speaker Change: Can we get that in prior quarters, we have locked PDC gross margin remained at the low end of our target range of 35% to 38% as we are focused on strong inventory tons and limited <unk> general merchandise.
Speaker Change: We knew pricing rates coming down we expect that same store expense increase will also come down.
Speaker Change: We also continue to invest in our people technology and store network to further drive operational efficiencies.
Strategically our pipeline for M&A is robust and we have demonstrated a strong track record of executing inorganic growth initiatives.
Speaker Change: Back to continue both in our existing markets and abroad.
Speaker Change: A combination of these initiatives will be driving forces behind our strong financial operating performance for years to come.
Speaker Change: And with that we'll open up the call for questions operator.
Thank you ladies and gentlemen, if you have a question or comment at this time. Please press star one on your telephone. If your question has been answered or you wish to move yourself from the queue. Please press star one again, we will pause for a moment, while we compile the Q&A roster.
Speaker Change: Our first question comes from John Hecht with Jefferies. Your line is open.
John Hecht: Good morning, guys, thanks, very much and congratulations on.
All of those achievements over the past few years.
Speaker Change: First question.
Speaker Change: I just wanted to you might have.
Speaker Change: Referred to it a little bit on the call, but it would be the tax rate was higher.
Speaker Change: I'm wondering just kind of was that a one time thing or is there a mix there where there may be some higher tax rates out of Latam.
Speaker Change: On an intermediate term basis or should we revert back to kind.
More.
Speaker Change: Consistent tax rate in the future.
Speaker Change: Thanks, John Yes, it was.
Speaker Change: I was slightly higher there were a couple of one off items.
Speaker Change: In the tax rate.
Speaker Change: For the quarter and for the for the year.
We.
Speaker Change: <unk>.
Speaker Change: Moving.
Some money out of Guatemala.
Speaker Change: Holding tax that would be a one time item.
Speaker Change: On the go forward basis.
Speaker Change: As Latin America becomes a bigger part of our net income there will be slight increases in the tax rate.
Speaker Change: It will go back to.
Speaker Change: The more normal.
Speaker Change: If you look at the entire year adjusted tax rate, it's going to be much more of that kind of thing going forward.
Speaker Change: Okay.
And then you guys.
Speaker Change: You guys, you talked about easy rewards and easy payments.
Speaker Change: There seems to be some good adoption.
Speaker Change: Is there a way for us to think about.
Speaker Change: Yes, I guess is there a way for us to think about how much penetration that can have an.
Speaker Change: What that can do to the efficiency of the business over time.
Speaker Change: Yes look I think.
Speaker Change: For the question Joe.
Speaker Change: Look I think on the plus side, we are getting towards.
Speaker Change: Full penetration, but we have got Fob port 4 million members now so it's.
Speaker Change: We would have when we launched this program we would never have thought we would have got to this level certainly.
Speaker Change: At this level and then this quickly so we're incredibly happy with how that program is going but I do think.
Speaker Change: Is it slowing now and so the penetration is we expect to face some growth, but really its now about engaging that $4 4 million, which will continue to grow but it's really now about engaging that customer base with all sorts of targeted marketing programs that are going to drive the key metrics. So I think.
Speaker Change: Going forward, it's now more about more about engagement rather than about penetration and then on the <unk> payment side that.
Speaker Change: That is that is really helping our team members in our stores to spend more time serving customers.
Speaker Change: Then simply the manual process of doing extensions, so I think the.
Speaker Change: First part of that program, which continues to grow really well.
Speaker Change: Just helping with our customer service in stores.
Speaker Change: That will grow as well, but both programs.
Speaker Change: So far already.
Speaker Change: Again, it's more about the engagement solid rather than rather than signing up new customers.
John Hecht: Okay on the online pirated say John.
I would also look at.
John Hecht: That's been running in the U S for quite a while.
Just recently launched that in Mexico.
John Hecht: And.
Made a launch it in.
John Hecht: All other countries as well so we don't have any of that occurring yet so it's still quite a lot.
John Hecht: Phil.
From a total company perspective growth, but from the U S. It's been there for a number of ESI, we wouldn't expect huge changes.
John Hecht: Okay.
John Hecht: Any.
Speaker Change: Comments on kind of the ongoing effects of the Hurricanes in Florida, just because I know you guys have a lot of stores there.
Speaker Change: We did say when those came through we did have a number of days, where the stores were shut down.
Speaker Change: Become quite efficient in our team on getting those stores back up and running we're one of the first stores to be up and running and being able to help our customers.
Speaker Change: From an ongoing basis.
We feel pretty good about it.
Speaker Change: Obviously, there has been a little bit of a slowdown as we will get back to normal in those regions.
Speaker Change: But we see that more of a short term than long term effect.
Speaker Change: Okay and then my final question I appreciate you guys answering all of these.
Speaker Change: Yes.
Speaker Change: I guess, just as Inflations studies in the U S.
Speaker Change: I don't know if thats quite occurred in Latam as much as the U S. But are you seeing any changes in <unk>.
Speaker Change: Customer behavior in terms of transaction size or loan demand or foot traffic or is it fairly steady.
Speaker Change: I'd say, it's been fairly steady.
Speaker Change: We're seeing pretty robust demand as you can see in the Q4 numbers both on the loan side and the sales side. So across all regions. We continue to see really strong customer growth.
Which is exciting and I think.
Speaker Change: Jewelry clearly has been a big driver of that as well.
Speaker Change: As Tim said in his remarks, we're really optimistic about growth from here.
And that's an exciting time to be an investor in <unk>.
Speaker Change: Great. Thank you guys very much.
Speaker Change: So one moment for our next question.
Speaker Change: Our next question comes from Brian Mcnamara with Canaccord Genuity. Your line is open.
Brian McNamara: Hey, good morning, guys. Thanks for taking the question. Congrats on the continued strong results I guess first off you guys announced an acquisition in September.
Brian McNamara: The <unk> business.
Brian McNamara: Just curious if you can comment on that I'm not sure I think it was expected to close on the 30 <unk> of October just curious what the rationale was there and how big of an opportunity to kind of see that.
Thank you, Brian and good morning, Yeah look we announced the acquisition of 53 stores down in Mexico, We would expect to do a closed it by now as you said.
We are just continuing to work on closing closing diligence items, so there'll be more to come on that.
Brian McNamara: The strategic rationale is is that that business is becoming a larger part of the customer's collateral down in Mexico, our competitors are doing it pretty well.
Brian McNamara: The across the full profit businesses as well as the government non for profit businesses and we've been a little behind in that tight up thoughts.
Brian McNamara: It's got to be a focus going forward. This one is the clear market latest however.
Brian McNamara: Well as I said, we continue to work on diligently to get to get it hopefully clause.
Speaker Change: Got it Thats helpful.
Speaker Change: Obviously.
Speaker Change: A big election last week.
<unk> per say, 60% plus of your stars are into Red States.
Can you guys comment on your expectation of regulatory change if any that you would expect with the new administration and remind us how friendly.
Speaker Change: Administration wires to the industry and its first term.
Thank you look the regulatory regime has been pretty steady in the U S for a long period of time, sometimes you see things.
Speaker Change: Same things happen in certain states like we saw in Illinois, a couple of years ago.
Speaker Change: Our investors and shareholders are aware of but this has been a quite a steady regulatory regime. It was.
Speaker Change: During the current administration it was in the form of Trump administration, but we don't expect to see any any real wholesale times, but that said we continue to invest in the area. We make sure we're on top of that from a state and federal level.
Speaker Change: But across all of our markets the U S and Latin America.
Speaker Change: It has been stable and we expect it to be stable in the future.
Speaker Change: Got it and then.
Speaker Change: Look the last few years have been very strange as it relates to your typical <unk> seasonality.
Speaker Change: Is your plan for 2005 are you expecting that typical seasonality to come back or how should investors think about PLO since it drives your business pretty significantly.
Speaker Change: Got it.
Speaker Change: Sorry, sorry.
Speaker Change: My phone just.
Speaker Change: Linked out there a little bit can you repeat that sorry, yes, no problem.
Tim Johnson: Tim PLO seasonality I mean, it's been walk you. The last couple of years as it's typical paydowns you didn't see with tax refund season, and Thats kind of played out for the whole year in the last couple of years like as you plan the business for 25, and your financial outlook like how should investors be thinking about PLO seasonality return are steady.
Tim Johnson: As you guys kind of thing.
Tim Johnson: Okay.
Tim Johnson: I think using what we saw in 2004 seams.
Tim Johnson: Seems to getting back to more normal seasonality, obviously tax refund season.
Tim Johnson: Has been a little bit more subdued in the last two years then.
Speaker Change: Because of Covid.
Speaker Change: So we think that is probably going to continue but we can.
Speaker Change: Let us see what happens.
Speaker Change: Happens this year in that period, but otherwise I think we're back to normal.
Speaker Change: The more than normal seasonality in the numbers.
Speaker Change: Got it and then maybe lock you can you comment on kind of what you guys are doing down in Latam.
Speaker Change: With layer and folks kind of turning around that business similar to kind of what you guys did a few years back with the U S kind of we saw a nice improvement there. This year, where are we in terms of that turnaround and should we expect continued margin improvement there in fiscal 'twenty five.
Speaker Change: It's a good call out Brian.
Speaker Change: So as you identify Blair Blair has been magnificent and his operations team with just a relentless focus on execution every day in our stores.
Speaker Change: And really it's been a people led story so people and culture is where we start started on this journey and as we said in our remarks.
Speaker Change: Started in the U S.
Speaker Change: Through it and probably financial year 'twenty two in Latin America.
And I think the most pleasing thing youll see in our results that we've announced.
Speaker Change: Over not just this continued momentum in Latin America across all metrics.
Speaker Change: You can see that our earning assets are growing really nicely and that's followed up with some really extremely strong growth numbers and EBITDA. So I think you can see that.
Speaker Change: That focus from financial year 'twenty two.
Speaker Change: With the rollout of an enhanced operating model with <unk> and.
Speaker Change: Enhance cultural model, it's really paying it's really you're seeing some consistent strong growth numbers now across that business.
Speaker Change: From here I think I still think there is a lot for us to do the macro environment continues to be very supportive down there as well as in the U S and I think loan growth sales growth.
It's still got plenty of plenty of runway I think on the margin side. There is certainly room for improvement there.
Speaker Change: That as you know we are we're most focused on terms because with with really strong PLO growth numbers that we're saying we need to make sure that we don't.
Speaker Change: Notably have an inventory problem, where things start to wides, but when you've got then you've got a significant issue down the track.
Speaker Change: Real focus is.
Speaker Change: Better lending it alone calendar strolled PLO growth, followed up with really really strong inventory turns.
Speaker Change: Which then produces that margin, but youre right, we would like to see.
Speaker Change: We'd like to see some increased margin there because.
Speaker Change: That's got a meaningful impact on the bottom line.
Speaker Change: <unk> primary focus these PLO growth and inventory turns.
Speaker Change: Got it and just one more from me. Thanks, I. Appreciate you guys, taking a bunch of questions here.
Speaker Change: On capital allocation priorities I know, Tim you kind of mentioned in your prepared remarks that youre exploring kind of any and all options for your 2025 converts.
Speaker Change: I think it's a big issue for some some long only is trying to get involved here.
Speaker Change: Should we expect I guess a decision on that I think you announced that the general meeting last year is that going in the timeframe investors should be looking at.
Well look I think we're going to monetize as much flexibility as we can.
Speaker Change: As Tim said in his remarks, we do have all of the alternatives on the table because our operating performance continues to improve so banks invest.
Speaker Change: Investment bank credit providers.
Speaker Change: Roll, telling us that our turns continue to improve.
Speaker Change: With stability in our performance.
Speaker Change: And management team. So I think we've got till till may until the bonds mature we've got we've got enough cash to just pay them down.
Speaker Change: One <unk>.
Speaker Change: A very real scenario and then we've got.
Speaker Change: Straight debt alternatives, we've got.
Speaker Change: Alternatives and so.
Speaker Change: The good news is we don't have a gun to our head to make a decision on this because of our strong liquid balance sheet. So we will we will take out time here to do what we believe is best for the long term.
Speaker Change: Low term of our business and for our shareholders, but.
Speaker Change: There's no magic to the IGN tolerated so.
Speaker Change: What do we got five six months here to make a call but the good news is as the terms seem to get better the alternative set is.
Speaker Change: Pretty diverse.
And so we will between now and may well come to a decision.
Speaker Change: Excellent I appreciate the candor guys best of luck.
Thanks, Brian.
Speaker Change: Our next question.
Speaker Change: Our next question comes from Kyle Joseph of Stephens. Your line is open.
Kyle Joseph: Hey, good morning, guys. Thanks for taking my questions actually just one from me really.
Going back to the election, any sort of other implications you see or any other impacts on the business in terms of.
Kyle Joseph: It's immigration or FX movements or anything just kind of how your initial thoughts there.
Speaker Change: Look thank.
Speaker Change: Thanks for the question look I think there are.
Speaker Change: There's no big tailwind or headwinds with this for us in terms of this.
Speaker Change: This new administration, I think our customer need cash.
Speaker Change: I think we provide a fantastic service to value for money secondhand goods and in this sector.
Speaker Change: It's usually.
Speaker Change: Yes.
Speaker Change: It operates quite independently of a political forces. So I think the macro here is continued to be helpful. We still see inflation, we still see interest rates that are relatively high gas prices are high but really this customer by spends or add ons and so I think with all of the internal initiatives that we've got going.
Speaker Change: We continue to be really excited about growth prospects and I think I think on balance that the new administration.
Speaker Change: Alright, see any big sort of macro changes here that is going to infect out effect outperformance.
Speaker Change: Got it thanks for taking my questions.
Speaker Change: One moment for our next question.
Speaker Change: Okay.
Speaker Change: Our next question comes from Andrew Scott with Roth Capital Partners. Your line is open.
Speaker Change: Hey, good morning, guys. Thanks for taking my questions and congrats on the continued progress.
Lot of my questions have been answered here. So just one quick one from me, but can you guys just kind of talk about the store pipeline.
Speaker Change: As you kind of head into 2025 here.
Speaker Change: Sure on the acquisition.
Speaker Change: On the acquisition side.
Speaker Change: Thanks for the question it looked at the pipeline continues to be robust we look at it in two ways. We look at it in areas that we already operate in and I think that is where our biases because.
The best M&A that we can do is where we've got really strong management team already and hopefully we are acquiring great talent. So.
In terms of the areas, we already are across U S and Latin America, the pipeline, particularly in Latin America remains strong I think Mexico is Mexico still of a very large opportunity with many many different independent large chains.
Speaker Change: And in the U S. I think as you're saying is this.
Speaker Change: It's still small acquisitions to do I think we bought 14 stores for the year across the U S, which I think is a pretty good result.
Speaker Change: And there remains to be more stores in the U S. But I think the most exciting part of our pipeline and one of the most exciting parts of our pipeline as al already our strategic investments in cash converters that in particularly in simple.
Speaker Change: We've got a.
Speaker Change: A lot of capital in simple and that business is performing really well, which you can see now in our deck and thats a potential acquisition for us.
Speaker Change: In the future. So look I think the pipeline is strong with vanguard the rest of the world as everybody knows it. So it is a massive industry.
Speaker Change: The rest of the world.
Speaker Change: And so I think I have a follow up to 10 years unicorp's capable of being much much bigger if you look at India, Philippines South America. This is Matt.
Speaker Change: Kingdom, just massive colon broking opportunities. So our sector is a very large one capable of a log scale, but for now I think the best use of our time and resource.
Speaker Change: To continue to grow in the markets we're in.
Speaker Change: As well as sort of exploring where else we might guys. So we're excited about the pipeline.
The other part of the pipeline is obviously add denials. We built we built 40, new stores across Latin America for 2024, I think we are getting much better at doing that and so.
Speaker Change: Like to see a pretty consistent pipeline of doing that.
Speaker Change: In the future too because.
Speaker Change: It can be a very very strong return on capital, particularly in Mexico, if you're doing it well.
Speaker Change: And we're really seeing some some good success in doing that so I think as excited as ever about.
Speaker Change: The inorganic pipeline and we've just got to make sure that we can staff those stores and manage them to the same level that we manage our existing store base and really then fund them. So.
Exciting times.
Perfect well, thanks for the detail and congrats again on the strong results.
Speaker Change: Thanks for the question.
Speaker Change: And I'm not showing any further question at this time I would like to turn the call back over to Lockheed for any closing remarks.
Thank you operator, and thank you everyone for joining us.
Speaker Change: On behalf of Tim It on.
Speaker Change: On behalf of our board I, just really want to thank again, the <unk> team.
What was probably our best ever year.
It's some really strong operating results the momentum in the U S and now in Latin America is obvious for everyone to say so why not done we've got a lot of work to do yet we're excited about the bold growth that we can produce for our shareholders.
For everyone for joining thanks to our shareholders also for a really good year and we look forward to talking to a lot of you through the course of the next few days.
Speaker Change: Thanks, a lot ladies and gentlemen. This does conclude today's presentation. You may now disconnect and have a wonderful day.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.