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Cash Converters profit up nearly 40%

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AAP

2013-02-14

Cash Converters' half year profits have soared nearly 40 per cent, thanks to a boost in revenue from its personal loans business.

The second-hand goods retailer and supplier of personal finance on Thursday posted a net profit of $18.4 million for the six months to December 31, up from $13.2 million in the previous corresponding period.

Total revenue from the company's UK and Australian operations grew 20.8 per cent, to $134.9 million, in the first half of the 2013 financial year.

Cash Converters said the strong results were bolstered by an increase in personal loan income and corporate store revenue.

In Australia, the company's personal loan book grew by 36 per cent to $84.2 million in the half, while in the UK it more than doubled from STG8.5 million to STG17.7 million ($A12.86 million to $A26.78 million).

Part of this growth had been generated by Cash Converters' online lending platform and cash advance business.

"We expect to see further growth in the second half as we now have launched a fully-integrated online cash advance product," it said in a statement.

"We have high expectations that this will be as successful as the online personal loan product."

Also encouraging was the reported 21 per cent growth in first half earnings from its company-owned store network in Australia.

However, very tough trading conditions saw Cash Converters' UK corporate stores run at a small first half loss.

The company said it expected continued growth in both its Australian and UK loan books and profitability over the full year.

This, it added, would be supported by the opening of a store in Merrylands, in Sydney's west, and another acquired from a franchisee in the Perth suburb of Gosnells.

"There are also a number of store acquisitions that the company is well placed to conclude very shortly," it said.

"This drives growth in financial service products through a larger store distribution network."

Cash Converters noted that it would cancel its listing of a small amount of shares on the London Stock Exchange later this month.

Its shares in Australia were up 3.25 cents, or 2.71 per cent, to $1.2325 at 1300 AEDT on Thursday.

The company will pay shareholders a fully-franked interim dividend of two cents per share.