AEON Credit Service (M) Berhad
Business Description:
AEON Credit Service (M) Berhad (AEON Credit) is a Malaysia-based company engaged in the
provision of easy payment schemes, personal financing schemes and issuance of credit cards under the brand names of Visa and MasterCard. The personal financing schemes and easy payment schemes are based on Islamic principles.
AEON Credit has three regional offices,
31 branches and service centers located in shopping centers and towns and a network of more than
4,300 participating merchant outlets.
As of February 20, 2010, AEON Credit had an approximately 113,000 principal credit cards in circulation. During the fiscal year ended February 20, 2010, the immediate and ultimate holding companies were AEON Credit Service Co., Ltd. and AEON Co., Ltd., respectively.
Current Price (14/1/2011): 3.90
2010 Sales 210,144,000
Employees: 1,500
Market Cap: 468,000,000
Shares Outstanding: 120,000,000
Closely Held Shares: 69,827,900
Announcement
Date | Financial
Yr. End | Qtr | Period End | Revenue
RM '000 | Profit/Lost
RM'000 | EPS | Amended |
| 21-Dec-10 | | 20-Feb-11 | | Other | 20-Nov-10 | | 56,097 | | 16,041 | | 13.37 | | - |
| 21-Sep-10 | | 20-Feb-11 | | Other | 20-Aug-10 | | 53,769 | | 14,783 | | 12.32 | | - |
| 15-Jun-10 | | 20-Feb-11 | | Other | 20-May-10 | | 53,025 | | 13,202 | | 11.00 | | - |
| 19-Apr-10 | | 20-Feb-10 | | Other | 20-Feb-10 | | 53,136 | | 14,305 | | 11.92 | | - |
ttm-EPS = 48.61 sen
ttm-PE = 3.90 / 0.4861 = 8.0 x
DY = 0.235 / 3.90 = 6.03%
Year DPS EPS
2006 Not Listed
2007 2.8 16.4
2008 9.5 27.8
2009 15.1 40.6
2010 16.9 45.2
2011 18.0E 49.0E
Historical
5 Yr
PE range 10.3 - 16.1
DY range 3.9% - 2.6%
Capital Changes
2007 1 to 2 Share Split
| Oct 1, 2010 | 0.115 Dividend |
| Jun 25, 2010 | 0.12 Dividend |
| Oct 2, 2009 | 0.105 Dividend |
| Jun 26, 2009 | 0.1134 Dividend |
| Oct 10, 2008 | 0.0876 Dividend |
| Jun 30, 2008 | 0.0744 Dividend |
| Jan 2, 2008 | 0.0135 Dividend |
| * Close price adjusted for dividends and splits. |
FYE 2010 2009 2008 2007 2006
RM’000
Income Statement
Revenue 210,144 186,919 151,797 116,043 69,119
Profit before tax 72,226 65,930 45,750 27,545 1 9,293
Profit after tax 54,275 48,757 33,394 19,702 13,506
Net EPS (sen)* 45.23 40.63 32.65 25.00 19.10
Gross DPS (sen) 22.50 20.10 12.84 6.84 5.33
Net assets per share (RM) 2.09 1.80 1.51 1.06 5.2
* Note: Earnings per share has been calculated based on weighted average number of ordinary shares outstanding in the respective year. Comparative earnings per share and dividends per share information have been restated after adjusting for the bonus issue and share split undertaken by the Company in December 2006
Balance Sheet 2010 2009
Assets
Plant and equipment 22,047 24,820
Investment 1,797 1,797
Receivables 360,704 323,325
Total non-current assets 384,548 349,942
Receivables, deposits
and prepayments 622,484 557,718
Cash and bank balances 3,161 2,462
Total current assets 625,645 560,180
Total assets 1,010,193 910,122
Equity
Share capital 60,000 60,000
Share premium 56,147 56,147
Retained earnings 134,315 99,696
Total equity attributable to
shareholders of the Company 250,462 215,843
Liabilities
Borrowings (unsecured) 460,041 358,529
Deferred tax liabilities 1,782 2,386
Total non-current liabilities 461,823 360,915
Payables and accruals 44,453 50,035
Borrowings (unsecured) 246,631 276,279
Taxation 6,824 7,050
Total current liabilities 297,908 333,364
Total liabilities 759,731 694,279
Total equity and liabilities 1,010,193 910,122
http://announcements.bursamalaysia.com/EDMS/subweb.nsf/7f04516f8098680348256c6f0017a6bf/f233541e9528412c4825772d00389b6d/$FILE/AEONCR-Cover%20to%20Page%2032%20(2.5MB).pdf
Chairman’s Statement
AEON Credit will explore further on how to give more
rewards to our customers and create more synergies
with our business partners.
Introduction
On behalf of the Board of Directors, I am pleased to
present AEON Credit Service (M) Berhad (AEON Credit)
Annual Report and Audited Financial Statements for
the financial year ended 20 February 2010.
2009 has been a
challenging year for the company.
Malaysia did not escape the effects of the global
economic downturn with the Malaysian economy
contracting in the first three quarters in 2009. With the
positive Gross Domestic Product (GDP) growth of 4.5
per cent in the fourth quarter of 2009, consumer and
business confidence have returned. The government’s
introduction of financial stimulus packages has helped
avoid a recession sweeping through niche areas of the
economy.
Fortunately the Company
achieved yet another year of
continuing improvement in its financial performance.
This is despite the challenging operating environment
and the uncertainties in the global financial market in
2009.
I am delighted to report that for the financial year
ended 20 February 2010, the Company’s
net profit
increased by 11.3% to RM54.26 million from a net
profit of RM48.76 million from the previous financial
year. This resulted in
improvement of earnings per share
from 40.63 sen in FYE2009 to 45.23 sen for FYE2010
Prospects
Prospects for 2010 remain bright. With economic
growth, the financial sector is expected to thrive and
domestic demand, particularly consumer spending,
is expected to be higher. These positive conditions
give us
ample opportunities to grow our business. We
will continue to focus on improving our products and
services. We will explore further on how to give more
rewards to our customers and create more synergies
with our business partners.
With the collaboration with AEON CO. (M) BHD.
(AEON CO.) on the new
AEON card, the Company
aims to maximize the business synergy of both
companies. The card was exclusively introduced for
JUSCO shoppers, focuses on loyalty points and more
rewards for the customers. It combines
JUSCO credit
card issued by the Company with the
J CARD issued
by AEON CO. as a “2 in 1” card which comes with
exclusive benefits and privileges to cardmembers as
well as other lifestyle benefits and rewards.
The partnership that we have with AEON CO. on
the new AEON card will offer more value to J CARD
members. In addition, the perks, benefits and the
support given by more than
500 privilege shopping
partners will firmly put the card in a leading position
within the credit card market and we are hoping that
this will help in boosting our credit cards revenue in
the near future.
I am pleased to announce that as of 18 March 2010
we have merged our Corporate Social Responsibility
activities with AEON CO. (M) BHD. under the AEON
Foundation. With this, we shall work hand in hand with
AEON CO. (M) BHD. to organize charitable activities
that are beneficial to the Malaysian society.
As part of our expansion plans and in order to capture
wider market segments, we have recently
opened a
new branch at Temerloh, Pahang and a service centre
at AEON Bandaraya Melaka Shopping Centre. The
Company will find ways to cater for the wider local
area needs and provide convenience to its consumers.
We will focus on promoting our consumer financing
products by carrying out more promotional activities
both in urban and suburban areas.
The establishment of new branches, service centres
and marketing offices nationwide are in line with our
plans to
capture larger market segments and our
continued focus to achieve robust growth.
Dividend
The Board of Directors has proposed a final dividend
of 12.00 sen per share less 25% income tax, which
would amount to final net dividend payment of
RM10.8 million. This would result in
total dividend
payout ratio of 37.3% of the net profit for FYE2010,
including interim dividends paid in the course of the
year. The Company had paid out net final dividends of
8.51 sen per share for last financial year, representing
an increase of 54.5% from the prerious year.
Acknowledgement
On behalf of the Board of Directors, I would like to
take this opportunity to thank Mr. Naruhito Kuroda
who relinquished his position as Managing Director
of the Company on 20 April 2010 to assume his new
position in AEON Credit Service Ltd, Japan. I wish
to express our sincere gratitude to him for his years
of service and contributions to the Company. At the
same time, I wish to welcome Mr. Yasuhiro Kasai who
has been appointed as the new Managing Director of
the Company on 20 April 2010 and Mr. Tomoaki Saito
who was appointed as the Director of the Company on
19 April 2010.
On behalf of the Board of Directors, I wish to thank
my fellow Board members, the Management and all
the staff members for their dedication and efforts to
the Company.
We also would like to thank all our valued shareholders,
business associates, bankers, government authorities
and most of all, our valued customers for their
continuous support to the Company over the years.
Thank you.
Dato’ Abdullah Bin Mohd Yusof
Chairman
Managing Director’s Operations Review
Our focus will be on new business
expansion and new services.
Financial Review
AEON Credit Service (M) Berhad was able to
achieve growth in operations and results despite the
challenging business environment during the year
under review. Nevertheless, the economic slowdown
affected certain segments of the Company’s customer
base and resulted in
reduced annual growth rate
for the Company’s consumer financing business in
comparison with the preceding year.
The Company’s recorded
higher revenue of RM210.14
million for the year, representing growth of 12.4%
from RM186.92 million total revenue in the previous
year. The improved results were due to the growth
in consumer financing achieved from the Company’s
Easy Payment Schemes, credit card and other products
during the year and the expansion of service and
business areas as well as retail merchants’ network.
Meanwhile,
profit before tax grew by 9.6% to RM72.23
million from RM65.93 million last financial year.
Earnings per share correspondingly increased to 45.23
sen from 40.63 sen in the previous year.
The
financing receivables as at end of FYE2010 was
RM946.27 million, representing growth of 8.4%
from RM872.86 million in the previous financial year.
Meanwhile,
non-performing loans (NPL) ratio was
1.80% as at February 2010 compared to 1.88% in
February 2009.
The financial year also saw the Company’s maiden fund
raising through an asset backed securitisation (ABS)
funding programme for RM150 million to tap the debt
capital market, as part of the Company’s strategy to
diversify funding sources in sustaining future business
growth.
Operational Review
Card Business
During the first three quarters of the financial year,
growth in credit cards in circulation was achieved
through
aggressive marketing promotions and the
launching of the new AEON Card in September 2009.
The new launching combines the
JUSCO credit card
issued by AEON Credit with the J CARD privilege card
issued by AEON CO. (M) BHD. as a “2 in 1” card. It
comes with various exclusive benefits and privileges
to card members which include enhanced ‘Double
Reward Points’ to cardmembers for spending at
JUSCO Stores/ Pasar Raya MaxValu nationwide.
However, the
introduction of government service
tax for principal and supplementary credit cards as
announced in October 2009 has affected the credit
and charge card issuers in Malaysia, including AEON
Credit. The industry faced cancellation of existing
credit cards by consumers who wished to reduce the
number of cards held as well as greater challenge in
issuance of new credit cards.
Various measures taken by AEON Credit in response
to introduction of the service tax included
offer of
benefits and “retention package” promotion to retain
cardholders. Majority of card cancellations were by
“non-active” card members, thus not affecting revenue
significantly. As at end of the financial year, total
principal credit cards in circulation were approximately
113,000
Easy Payment and Personal Financing Business
Easy Payment Schemes continue to be the
major
contributor to the profit growth of the Company.
During the year, AEON Credit focused on strategic
marketing efforts in a challenging market environment
through merchant development, promotions, roadshow
activities etc, both in urban and suburban areas. The
various promotions include a promotion in conjunction
with the AEON Credit Group achieving issuance of 20
million credit cards in Asia and numerous nationwide
and local area promotions to boost the sales volume,
including promotions in collaboration with merchants
and major suppliers.
The Company continues to
expand its network of participating merchants and
chain stores, which offer Easy Payment schemes to
customers nationwide.
Through
AEON-Biz, a financing scheme for small
companies to purchase office automation equipment
such as computers and photocopying machines, the
Company continues to cater for the demand from
SME business segment. Towards the end of the
financial year, the Company has expanded its
“Used
Car Easy Payment” scheme which provides financing
to customers who are seeking for second-hand
car financing to East Malaysia and certain states in
Peninsular Malaysia.
Further Business Expansion
The Company expanded its network of branches and
service centres to
31 locations nationwide to bring
convenience to its customers, including the latest
service centre at AEON Bandaraya Melaka Shopping
Centre and a branch at Temerloh.
Six marketing
offices were also established nationwide at Segamat,
Sitiawan, Taiping, Sungai Petani, Sandakan and Sibu to
cater for local area merchant service needs.
Future Plans
With the improvement in the Malaysian economy,
AEON Credit expects to
maintain growth in
performance in a scenario of improved consumer and
business confidence.
The Company is looking at ways to increase its card
base and with the new AEON card that offers double
J CARD points for every Ringgit spent at any JUSCO
stores nationwide, it targets to attract more shoppers
and J CARD members. Besides, with the conversion of
all card face to one standard brand name – “AEON”,
we are able to
create awareness and recognition of
our products and achieve new growth in our cards
recruitment. The standard brand name will also enable
AEON CO (M) BHD. and AEON Credit Service (M)
Berhad to realise greater synergies in the Malaysian
card business market and send message to our potential
customers on the combined benefits offered.
The Company
will also expand on its business
associates and affiliated merchant network and boost
the uptake of its Easy Payment Scheme products. As
part of the Company’s expansion plan, it will embark on
services via website for the convenience of customers,
business partners and merchants in 2010/2011. We
will introduce more convenient functions & services to
our customer via a
new AEON Web Portal and also
improve operational efficiency by introducing online
easy payment application submission for merchants.
The company will also continue its collaboration with
AEON CO (M) BHD. on improving the AEON Loyalty
program by taking responsibilities on the development
of new participating merchants as well as outsourcing
of reward point management system and operations.
The
new AEON Loyalty program with more attractive
benefits & privileges is scheduled to be launched by
the AEON Group in early 2011.
Our wide network of merchants and the increasing
number of JUSCO stores in Malaysia have also given
us opportunity to broaden our card business scope to
include credit card transactions acquiring business,
which is targeted to be launched by 2011.
AEON Credit expects to maintain profitability
growth in the prevailing competitive environment
through improvement in operational efficiency and
productivity.
Acknowledgement
I would like to thank the Board of Directors, employees,
our shareholders, customers and business associates
for the confidence and continued support for the
Company. I would also like to express my gratefulness
and sincere appreciation to the management and
staff of the Company for the continuous support and
dedication, which are important for the future growth
of the Company.
Yours sincerely,
Yasuhiro Kasai
Managing Director
i) a final ordinary dividend of 11.34 sen per ordinary share less tax at 25% totalling RM10,206,000 (8.51 sen
net per ordinary share) in respect of the year ended 20 February 2009 on 14 July 2009; and
ii) an interim ordinary dividend of 10.50 sen per ordinary share less tax at 25% totalling RM9,450,000 (7.88 sen net per ordinary share) in respect of the financial year ended 20 February 2010 on 20 October 2009.
The final ordinary dividend recommended by the Directors in respect of the year ended 20 February 2010 is 12.00 sen per ordinary share less tax at 25% totalling RM10,800,000 (9.00 sen net per ordinary share)
4 AEON CO. (M) BHD 2,580,000
0.38 (3.66%)
