Transcript RC&C FINANCE

COMPANY PRESENTATION
2006
RC&C FINANCE
Who is RC&C Finance?
 Business Model
 Funding
 Base Analysis
 Relevant Statistics
 The Future

RC&C FINANCE
RC&C Finance is the in-house asset finance
company for the Reunert group.
 We specialise in office equipment for
corporate customers for Nashua, Panasonic
Sietel and their franchises.
 Only Rental agreements are financed.
 We advance funds against against a fixed
income stream.

MISSION STATEMENT
“Working together, to create wealth, through
innovative finance products, to maximise
the rewards for all our partners in profit”
KEY SUCCESS FACTORS
Best rates.
 Best turnaround times.
 Best services.
- One on one relationships.

BASE ANALYSIS

SPLIT BY CUSTOMER
 Nashua
88%
 Panasonic
8%
 Sietel
4%
ISO 9001:2000
Currently under audit
 Certification due November 2006.

BBBEE CERTIFICATION

Rating: “Non BEE-Limited Contribution”.
Investment in Staff Training.
 Launched Bursary Scheme in conjunction
with Reunert College for 2 persons.
 Investment in Corporate Social Investment
via Nashua Franchises.

COMPETITION
ABSA Technology Finance (Union)
 Sasfin
 Merchant West
 Technofin
 Nefco

CREDIT VETTING
 Investment
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in a new system written by Acuo, a
Reunert company.
Enhanced scorecard model.
More user friendly.
Web based design.
- give an online effect for major customers.
Improved exception reporting.
Improved Data Base management.
BUSINESS MODEL

Nashua Finance

RC&C Finance
NASHUA FINANCE
Existing Model
 Bill to franchise.
 Franchise collects rentals as an agent.
 Recourse risk taken by the franchise.
 Best rates available.
 Perform regular franchise reviews.
 For Nashua and some Panasonic.
RC&C Finance
Bill Direct to end user.
 We collect directly.
 Finance company takes the credit risk.
 Rates competitive with opposition product.
 No franchise review procedure necessary.
 For Panasonic, Siemens and ……

FUNDING
Overnight Funds from Shareholders.
 Fixed Rate deals backed by fixed funding.
 Utilise Swaps to fix margin on fixed rate
deals.
 Swaps matched to the expected life of the
deal.

INTEREST RATES
Historically rates have been much higher.
 Volumes not expected to drop much.
 Reduces temptation to rollover base.
 Margins are managed.
 Fix where necessary.
 No material effect expected.
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BASE ANALYSIS (Cont’d)
Approx’ 10,000 End users.
 Approx’ 55,000 contracts.
 Largest End user 1.2% of total base.
 Top 50 End users = 20% of total base.
 Top 50 Geographically spread throughout
SA ( Mainly Gauteng and Western Cape).
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STATISTICS - CREDIT
Credit Vet average 1,488 applications pm.
 Approval ratio 75% (average).
 Discount average 1515 contracts.
 Turnaround times.
 Average
8h04
 Existing Users
6h56
 New Users
12h36
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EXCHANGE RATES
Direct : No effect.
- No imports.
- No exports.
 Indirect:
- Potential slowdown in dealer business.
- Increase prices, increase payout values.
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BASE ANALYSIS
Own Book
Sold Book
Total
Value
(R’000s)
1,323,848
151,684
1,475,532
Average
period to
run
36 months
14 months
30 months
BASE ANALYSIS (Cont’d)
Fixed Rentals.
77%
 Linked to Prime Rentals.
23%
 Coverage of Fixed Deals.
77%
 Equity Cover
16%
 Swaps
84%
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STATISTICS - RATIOS
2002
Return on 30%
Equity
Cost to
16%
Revenue
Return on 3%
Assets
Bad Debts 0.5%
2003
5%
2004
52%
2005 2006
49% 57%
18%
9%
11%
11%
0%
10%
3%
3%
0.9%
0%
0%
0%
THANK YOU