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RC&C FINANCE COMPANY 31 July 2008 Mike Purnell

RC&C FINANCE COMPANY 31 July 2008 Mike Purnell. RC&C FINANCE. Who is RC&C Finance? Business Model Risk Management Funding Base Analysis Relevant Statistics The Future. RC&C FINANCE. The in-house asset finance company for the Reunert group

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RC&C FINANCE COMPANY 31 July 2008 Mike Purnell

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  1. RC&C FINANCE COMPANY 31 July 2008 Mike Purnell

  2. RC&C FINANCE • Who is RC&C Finance? • Business Model • Risk Management • Funding • Base Analysis • Relevant Statistics • The Future

  3. RC&C FINANCE • The in-house asset finance company for the Reunert group • Specialise in office equipment for corporate customers • Nashua • Panasonic • Various others suppliers • Only Rental agreements are financed • We advance funds against a future income stream

  4. MISSION STATEMENT “Creating wealth for all through innovative finance and service excellence.” VALUES Respect Integrity Personal Development Ownership Passion Communication

  5. KEY SUCCESS FACTORS • Competitive rates • Best turnaround times • Service Excellence • One on one relationships

  6. BASE ANALYSIS • SPLIT BY CUSTOMER • Nashua 76% • Panasonic 9% • Other 15%

  7. BBBEE CERTIFICATION • Rating: “Non BEE-Limited Contribution” • Re-Rating in November 2008 • Investment in Staff Development • Development of “Black Management” • Investment in Corporate Social Investment via Nashua Franchises

  8. COMPETITION • ABSA Technology Finance (Union) • Sasfin • Technofin • Nefco • Fintech • Itec Finance • Custom capital

  9. BUSINESS MODEL Nashua Finance Quince Asset Rentals

  10. 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

  11. Quince Asset Rentals • Bill Direct to end user • We collect directly • Finance company takes the credit risk • Rates competitive with opposition product • No franchise review procedure necessary • Panasonic, Siemens, Brokers and other OA Dealers

  12. Quince Asset Rentals • Started October 2006 AS Direct Billing Division • Rebranded Quince in 2007 under JV • Aggressive growth in 2007 • Bad debts high in current year – Over 3% of book • Breakeven division currently

  13. RISK MANAGEMENT • New computerised vetting system • System scores deals • Executive review of overrides • Pricing verifications • Voice recording confirmations • Quality control prior to payout • EFT debit orders on each deal • Ongoing analysis of bad debts against base • Monthly credit committee reviews

  14. RISK MANAGEMENT • New computerised vetting system • Web based, real time front end • Balanced Scorecard • Management/Exception reports daily • Customer facility limits • Deal status tracking

  15. STATISTICS - CREDIT • Credit Vet average 3,165 applications pm • Approval ratio • Nashua Finance 67% • Quince 27% • Discount average 2,038 contracts. • Turnaround times • Average 8h30 • Existing users 3h36 • New users 11h03

  16. FUNDING • Conduit Securitisation • Bank overnight facilities • Shareholder overnight facilities • Fixed rate deals backed by Swaps • Swaps matched to the expected life of the deal

  17. INTEREST RATES • Margins are managed • General Cut backs expected in volumes • Rand Devaluation – Increased values per deal ?

  18. BASE ANALYSIS - Customers • Approx’ 13,000 end users • Largest end user • 1.4% of total base • Top 50 end users • 19% of total base • Top 50 • Geographically spread throughout SA ( mainly Gauteng and Western Cape)

  19. BASE ANALYSIS

  20. BASE ANALYSIS (Cont’d) • Fixed Rentals 67% • Linked to Prime Rentals 33% • Total Contracts 65,000

  21. STATISTICS - RATIOS

  22. THANK YOU

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