Cash Converters gets $64 million capital injection

Pawn shop franchisor and payday lender Cash Converters announced yesterday that it had received a $64 million injection of capital from a US short-term lender and pawn shop operator EZCORP.

Cash Converters had announced its subscription agreement with the Austin, Texas company earlier this year, but the acquisition of 108 million shares, representing 30 per cent of the fully diluted capital of the company, only went through on Friday.

EZCORP will take two positions on the Cash Converters' board.

Cash Converters reported revenue of $94 million for the year to June, up from $74 million the previous year, and net profit of $16.2 million, up 6.7 per cent on the previous year.

Pawnshop operations accounted for 69 per cent of revenue and lending made up the balance.

It will use the capital to continue its expansion into the United Kingdom market and pursue its strategy of converting franchise operations into corporate stores.

The company announced yesterday that it had bought two franchised stores in northern England. The company owns 41 stores - 17 in Australia and 24 in the UK.

In September the company started to trial its lending products in the UK.