Thorn Group buys Cash Resources Australia

Finance company Thorn Group has moved into the receivables finance market, with the acquisition of invoice discounting business Cash Resources Australia.

CRA, which will sit within Thorn's equipment finance division, has A$40 million in receivables and a client base of 200 small businesses. Thorn paid $42.8 million for the business.

Thorn managing director James Marshall said loan brokers had been telling the company for some time that they were keen to have a working capital product to offer clients.

The announcement of the acquisition coincided with the release of Thorn's financial report for the six months to September. Net profit for the half was $15.2 million - an increase of 14 per cent over the previous corresponding period.

Revenue was up 33 per cent to $149.9 million and receivables were up 42 per cent to $307.6 million.

EBITDA in the Radio Rentals division was up 15 per cent to $26.7 million. Marshall said the company's 48-month "rent, try, buy" product had made store finance more affordable for more consumers.

EBITDA in the Thorn Equipment Finance division rose 62 per cent to $2.5 million.

Marshall said the CRA acquisition had taken TEF's receivables book over $100 million. At that level it would start to generate efficiencies.

Thorn Financial Services, the consumer lending business, grew EBITDA by nine per cent to $500,000. The division has made a big investment in new short-term lending products, which were launched last year.

Originations were up almost double to $18.5 million and revenue was up $6.2 million. Marshall said the investment in building a new website and marketing meant that revenue growth was not flowing through to earnings yet.

The purchased debt ledger and credit management business, NCML, produced EBITDA of $1.9 million - unchanged from the previous corresponding period.