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Published: 1 september 2021 18:53

AS DelfinGroup plans to raise 15m EUR new equity through IPO

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123RF.com nuotr. / Finances
Latvian financial service company AS DelfinGroup announces the financial guidance for 2022, representing interim targets of previously announced long term targets for the year 2024. Financial targets set for 2022 foresee EBITDA to reach 12 million euros and profit before tax of 8.7 million euros. This announcement complements information about the long-term targets for year 2024 announced by the Company on 28 July 2021.

Chairman of AS DelfinGroup’s Management Board Didzis Ādmīdiņš: “Financial targets for 2022 are announced in relation to the Company’s plans for an initial public offering (IPO) of shares and admission to trading on the Nasdaq Riga stock exchange regulated market. The plans for 2022 are in line with our vision for the Company's future growth and the previously set financial goals for 2024. In the case of a successful IPO (and applying the mid-point of gross proceeds) it is expected to immediately reduce the Company's annual interest expense by up to circa 1.7 million euros. Raising additional equity will also enable the Company to strengthen its market position, focus on the development of existing products, as well as develop new consumer lending products for various groups of society.”

The Company’s financial targets for 2022 and 2024 are based and valid for the assumption of 10 to 15 million euros to be raised in the planned IPO process. The table summarises the audited results of AS DelfinGroup for 2020 and the Company's financial targets for 2022 and 2024.

Indicator*

2020 audited results

2022 interim targets

2024 targets

Net loan portfolio

EUR 34.6 million

EUR 51 million

EUR 70 million

Cost-to-income ratio

57%

<52%

<45%

Cost of interest-bearing liabilities

12.7%

8%

<8%

Return on Equity (ROE)

44%

>30%

>30%

Equity ratio

20.1%

>27%

>27%

EBITDA**

EUR 9.3 million

EUR 12.0 million

EUR 17.6 million

Profit before tax

EUR 4.65 million

EUR 8.7 million

EUR 12.9 million

Dividend payout ratio

55%

>50%

>50%

*APM (alternative performance measure), which calculations are based on the Company’s consolidated indicators:

Cost-to-income ratio = ((Sales expenses) + (Administrative expenses) + (Other expenses (excluding Loss from cession of non-performing loans)) ) / ((Net sales) – (Cost of sales) + (Interest income and similar income) + (Other operating income) – (Interest expenses and similar expenses)),

Cost of interest-bearing liabilities = weighted average nominal interest rate calculated by amount of interest bearing liabilities as at period end,

Return on Equity (ROE) = (Net profit for the period) / ( ((Equity as at start of the year) + (Equity as at year end)) / 2), Equity ratio = (Equity)/(Total assets),

EBITDA, Earnings before interest, taxes, depreciation and amortization = (Profit before tax) + (Interest expenses and similar expenses) + (Rights of used assets depreciation) + (Depreciation of fixed assets) + (Amortization),

Dividend payout ratio = (Dividends paid during the period)/(Net Profit for the period).

On 9 July 2021, AS DelfinGroup issued bonds via private placement in the amount of 5 million euros with an annual coupon interest rate of 9.75%, thus continuing to execute its long-term strategy. Demand for bonds exceeded the issue volume 1.85 times. The proceeds from the bond issue are being used to refinance current liabilities, which will ensure a reduction in the Company's total funding costs.

In March 2021, AS DelfinGroup announced its plans for the launch of an initial public offering (IPO) of its shares on the Nasdaq Riga exchange during the second half of 2021. LHV Bank and law firm Eversheds Sutherland Bitāns are acting as AS DelfinGroup planned IPO advisors. For more information about the planned IPO, sign up to news on our homepage: https://www.delfingroup.lv/invest.

About AS DelfinGroup

AS DelfinGroup is a licensed financial services company founded in 2009 and represents the brands Banknote, VIZIA, and Rīgas pilsētas lombards (Riga City Pawnshop). The company employs 277 professionals in 93 branches operating in 38 Latvian cities. AS DelfinGroup is a member of the Latvian Chamber of Commerce and Industry and the Latvian Association of Alternative Financial Services and has received the Gold Level status of the State Revenue Service cooperation programme. AS DelfinGroup core services are the retail sale of pre-owned goods in branches and online, pawn loans, consumer loans, and loans specifically designed for people at retirement age. AS DelfinGroup bonds are listed on the Nasdaq Riga First North bond list. In 2020, the company's revenue was 23.7 million euros, the loan portfolio reached 34.7 million euros, EBITDA increased to 9.3 million euros and profit before taxes reached 4.6 million euros. AS DelfinGroup estimated taxes for 2020 are 3.42 million euros. The total number of customers served by AS DelfinGroup exceeds 400 thousand, and on average a month, the company issues 35 thousand different types of loans.

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