Mr. Todd Hudson reports
AXIS REPORTS RECORD SECOND QUARTER FINANCIAL RESULTS
Axis Auto Finance Inc. has released its fiscal second quarter results for the period ended Dec. 31, 2021.
Q2 financial and business highlights:
Auto loan originations increased 21 per cent to a record $36.7-million;
- Record auto loan portfolio balance of $197-million, up 29 per cent year over year;
- Revenues at record levels at $10.1-million;
- Adjusted earnings of $1.6-million;
- 21 per cent year-over-year reduction in annualized credit losses to 7.77 per cent;
- Launched direct-to-consumer (D2C) platform DriveAxis.ca;
- Increased senior credit facility to $120-million while reducing borrowing cost;
- Completed a $15-million equity investment by Westlake Financial Services.
Auto loan originations were $36.7-million in the quarter, a 21-per-cent year-over-year increase; $20.6-million was owned and on balance sheet assets and $16.1-million was loans managed for Westlake Financial Services. These record origination volumes resulted in Axis's owned and managed auto loan portfolio assets rising to $197-million, consisting of $131.4-million of owned and $65.6-million in managed assets.
Equipment finance origination volumes in the quarter were $24.5-million, $5.4-million in owned and on balance sheet assets, and $19.1-million brokered to third parties. In aggregate, the Axis on balance sheet portfolio balance was $138.1-million at quarter-end.
Revenues for the quarter rose to a record $10.1-million, an increase of 4 per cent year over year.
Adjusted earnings for the quarter was $1.6-million, or 1.4 cents per share, as compared with $1.5-million, or 1.5 cents per share, for the second quarter of fiscal 2021. Net income for the quarter was $200,000, or 0.2 cent per share, as compared with net income of $400,000, or 0.4 cent per share, in the second quarter of fiscal 2021. Adjusted shareholder equity was $59.6-million as at Dec. 31, 2021, or 47 cents per share.
Annualized credit losses for the quarter were 7.77 per cent, down from 9.88 per cent last year, representing a 21-per-cent improvement. Furthermore, the company concluded the quarter with reportable delinquency of 3.65 per cent.
During the quarter, Axis launched DriveAxis.ca, its D2C platform. This 100-per-cent-digital retail solution allows consumers to purchase/finance a used vehicle from anywhere at any time and get it delivered to their home. The pilot, which was launched in the Ontario market, featured five dealers listing approximately 500 vehicles on the platform.
In October, 2021, Axis's senior secured credit facility was expanded to a maximum committed financing amount of $120-million while borrowing costs decreased to prime rate plus 1.90 per cent. The maximum advance rate on the facility was increased to 77 per cent.
In November, 2021, Axis closed a non-brokered private placement of common shares at a price of 50 cents per common share for total gross proceeds of $15-million. The investment was made by NowLake Technology LLC, the fintech parent company of Westlake Financial.
About Axis Auto Finance
Axis is a financial technology company changing the way Canadians buy and finance used vehicles. Through the company's direct-to-consumer portal, DriveAxis.ca, customers can choose their next used vehicle, arrange financing and get the car delivered to their home. Through its indirect loan origination channels, Axis continues to provide alternative used vehicle financing options to roughly 30 per cent of Canadians (source: Equifax) who have credit scores in the non-prime range. All Axis auto loans report to Equifax, resulting in over 70 per cent of customers seeing a significant improvement of their credit scores.
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