EZPW
#It's quite a bit in there, Dave, but so let me just see if I can pick it all up.
I mean the gold price has been moving pretty much between about $1,200, close to $1,300 over the last couple of months but we're seeing commodities all around the oil and iron ore starting to come off and [Compass] coming off as well.
So gold has actually held that range quite strongly as the others are starting to move.
So I think that it seems to have settled around that $1,250 to $1,275 level.
That doesn't really change it too much for us.
I mean we haven't been an active scrapper where some of the margins were made previously and I think if you go back to the heady days of 2010-11, we were actually making some substantial profits through the scrapping, you'll see here the margin on scrap for the quarter was 13%.
Some of our competitors are actually having lesser margins than that on scrap.
So I think in order to make the heady days, you would have to see gold moving back towards that $1,400, $1,500 level, which I don't think we're going to see.
But that's just my view, I'm not a very good commodity speculator.
So you might have a better view of that than me.
In terms of the industry's consolidation, and I think the question is when would we ---+ you would think EZCORP would see multiples close to where our competitors are and whether the shareholding is a depressant on those multiples.
I think once [new] Grupo has been dealt with, you will get a cleaner position to be able to value the Company and we're showing that with the pawn results and the focus on the customer, we are getting some very strong returns from what has been our core business.
So we need to ensure that we manage the Grupo process well to actually show the Company's potential to the investment community.
Now, the split shareholder structure, I think everyone has got a view as to whether there is some form of discount for having that structure or whether there isn't.
And I'm actually reasonably neutral on it to the extent that as long as we are outperforming our peers and moving forward with our customers, the focus I have is more about driving the value in the business, not worrying about the shareholding structures of the business.
And if I were to look at where we are in nine innings, we're certainly nowhere near the seventh innings stretch.
I think once we move Grupo and deal with it in the right manner, I think we're still probably in the second or third innings, which is where I think we are in our strategic three-year cycle as well.
So I hope that answered all those questions, <UNK>.
I don't think we've put $17 million in.
(inaudible) and got that hit.
I think for the next quarter, we sort of indicated that we'll think for the next quarter is probably running that, maybe, the two to three, but it's $1 million per month, but it depends on the funding lines we put in place at Grupo as to what that actually plays out to and as <UNK> suggested, post June, some of the amortization of some of those funding lines pick up and we are working closely with an advisor to actually make sure we can have deadlines in place through that period of time.
So we will probably be in a better position at the end of the June quarter, build with that funding line to give you more clarity about the quarter ahead.
I'll say enterprise value is probably a better landing point based upon the current sort of capital structure that EZCORP has within Grupo and extrapolating out for five plus years on a DCF basis.
So it's a mechanical type of process out there that comes up with that valuation.
[Mention the net assets].
Yes, [apply the] fair value of what the assets in theory worth, not necessarily what's on your balance sheet.
So if anyone wants a hour-and-a-half accounting seminar, please let me know.
I think we've had interest from all of the above.
So it's not specifically coming out of one quarter.
So we have had expressions of interest from US as well as Mexican.
So it's still too early to see where it lands, <UNK>, because I think obviously, [some will be kicking tires, some will be interested] and we will figure that out over the next few weeks.
Thanks, <UNK>.
I would like another one of those, but no, that's it.
<UNK>tian, that's all there is
Last February 2015, we acquired a business.
At that particular point in time, equity was used.
And there were certain structures in that.
The share price wasn't allowed to move by certain amounts for went down.
Then, we had to ---+
Yes, and substitute with cash.
Yes, I think it was Cash Pawn.
It's Cash Pawn, is around the Austin area and Central Texas area.
That was payable a year after the deal was signed.
So there is no more sitting on that one.
It's actually called a simple pub structure.
At an EZCORP level, we have $230 million worth of convertible bonds.
I beg your pardon.
Basically the pawn business.
The last 12 months EBITDA for the pawn business.
Off the top of my head, I don't know, but the maturity profile is in 2019.
And so, and that's when the $230 million is due, there's no payment, there's no covenant, there's nothing ---+ no operating covenants sitting underneath that.
So that's a pretty straightforward type of fund.
The rest of it is associated with Grupo Finmart into the two components as I alluded to earlier on.
And that really is split between the VIEs, which is about $50 million, $90 million is Grupo Finmart's direct debt and that has amortization schedules associated with it and obviously, you're trying to substitute new debt.
No, there's no ---+ a lot of the loan structures have ---+ you have the assets sort of sitting against it, you have the loan books sitting against us in our assets, sitting there to service those loans.
So it's pretty straightforward.
It's not really structured around EBITDA multiples or any of those type of metrics that normally you see floating around.
We would have to look at some of the other options which, one might be complete sale or might be partial sale, would look at another range of options, but looking at putting some instruments to financing and place to ring-fence it, but it's a good business and we want to make sure that we represent it completely and we've got good expressions of interest.
So we don't have to reconsider that in-depth at this point of time until we get further down the track.
As you've seen that there is some change of control issues, I think that's hidden in some of these, we will be having discussions with them around that.
But we don't think that should be too much of an issue.
Yes, that's correct.
We sort of mentioned it just briefly before a call.
We think it's probably a couple of million a month through to June, but we're trying to work with some new financing structures, which will alleviate the pressure on us.
So by the end of June, hopefully, we'll be in a better position with those discussions underway to give you a better color around that, what they would be going forward.
As <UNK> had mentioned on the slide that June, we start some of the amortization of these lines start increasing.
So we're doing a lot more than that to try and minimize any cash that does have to go into the Grupo business.
In what regard, <UNK>.
Not that I'm aware of.
I haven't been through the documents and that full deep ---+ there's nothing I'm aware of and seem to have ---+
No.
The base point one has with the recourse nature has requirement on us to top up any cash if there's a shortfall in the servicing.
And that has been that $0.5 million a month, I think it amounted US dollars.
But typically, most of these structures have overcapitalization in them, which means that even if some of the delays do occur, there's self-servicing and with our improved collections sitting behind it, the improvement in those collections has meant that they're really self-sustaining.
Under the main VIE which therefore, they would be required to ensure the servicing of those loans occurs loan with the contracts that are in place, the monthly contracts in place.
So there would be, as we've outlined previously with those particular VIEs, there is a requirement on Grupo in the first instance and the EZCORP ---+ in the second instance.
It's the same that 2017, that the four major VIEs run off and there is a surplus portfolio of assets that sits within those.
So can we start with the first one.
Page 2 of ---+
It's public securitization.
It's a public securitization that was done.
So, that (multiple speakers) that start amortizing in June (multiple speakers) a bunch of assets against that.
Listen, I don't ---+ if we just move on the next one, I'll pick up the answer to that question.
Assets and liabilities when they can ---+ yes, that's the consolidated assets of Grupo, including the trusts.
That would be the net value of the loans on the books that are performing.
If I [come at] you, first, just to your first point, the securitization there that does the public securitizations that amortize, and it's starting, I think, we pulled it up, it's a better million a month to somewhere in another note in the Q.
And that is probably $35 million of the total Grupo budget.
So your point was, great, you need to take that off to see what's all the public securitization.
Thanks, Kate.
We would just like to thank everybody who dialed along (inaudible) webcast.
Thanks for your interest in the Company.
<UNK> and <UNK> are available for follow-up questions later this morning.
And this concludes our call.
So, thanks very much for everyone.
