Shares in goeasy (TSX:GSY) jump 14pc on strong Q2 results

• Shares in financial services provider goeasy (GSY) have jumped more than 14 per cent this morning following its strong second quarter financial results
• Net income for the period jumped 66 per cent to a record of C$32.5 million, compared to just $19.6 million in the second quarter of 2019
• This resulted in a similar increase in diluted earnings per share, which rose 67 per cent to $2.11
• The company intends to re-publish its three-year forecast once economic conditions stabilise
• Goeasy (GSY) is currently up 9.21 per cent and is trading at $69.03 per share

Shares in financial services provider goeasy (GSY) have jumped more than 14 per cent this morning following its strong second quarter financial results.

By 10:00am, the company’s shares had reached a price of C$73.20, representing a substantial gain over yesterday’s closing price of $63.21.

The Mississauga-based company reported a 66 per cent increase in net income for the period to a record of $32.5 million, compared to just $19.6 million in the second quarter of 2019.

This increase resulted in a similar growth in diluted earnings per share, which grew 67 per cent from $1.26 to $2.11.

Goeasy also reported an improvement in revenue for the second quarter, although not as drastic. Total revenue increased 1.9 per cent to $147.9 million last year to $150.7 million, largely driven by a growth in the company’s consumer loan portfolio.

However, any further improvements were offset by lower commissions on ancillary products and higher levels of loan protection insurance claims.

Jason Mullins, President and CEO of goeasy, said the company’s second quarter results demonstrate its unique strength and resiliency.

“Record low credit losses and reduced originations combined to produce excess cash flows, which lifted our total liquidity to $260 million during the quarter and enabled us to repurchase an additional $20 million of our shares at an attractive return level.

“During the quarter we also recognised a gain on our investment in PayBright, as their annualised revenues have now increased by over 85 per cent since we arranged our equity position,” he added.

Despite the record performance, goeasy conceded that there remains a significant level of uncertainty related to the impacts of the COVID-19 pandemic. As such, the company said it will re-publish its three-year forecast once economic conditions stabilise.

Goeasy (GSY) is currently up 9.21 per cent and is trading at $69.03 per share at 11:10am EDT.