ADAD continues to drive high growth for Thorn Group's Cashfirst brand. Cashfirst's loan book has grown explosively since ADAD implemented an ongoing National Performance TV advertising strategy for the lender.

This from the Sydney Morning Herald:
Despite feeble credit growth and jittery consumer sentiment playing havoc with retailers, the owner of Radio Rentals and low-doc lending business Cashfirst has posted a 30 per cent rise in first-half profits.

Shares in the parent company, Thorn Group, rose 4.3 per cent to $1.70 after it turned in earnings of $14.3 million - up 29.5 per cent on the previous corresponding period.

The consumer and financial services company enjoyed revenue growth of 20 per cent, to $96 million.
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Thorn's managing director, John Hughes, said tough retail conditions and cost-of-living pressures drove growth within Radio Rentals and Rentlo, with furniture rentals surging 26 per cent and whitegoods and television rentals also increasing.

''Consumer and economic conditions have been very tough,'' he said. ''There's a growing number of people who are cash and credit constrained, particularly driven by the [increasing] cost of non-discretionary items such as water, gas, electricity [and] petrol.''

Mr Hughes said Thorn has benefited from the change in the average life of contracts for its rental customers, which have increased from 23 months to 27 months over the past four years.

The unsecured loan book of Cashfirst has also increased, up 25 per cent to $15 million in the year, driven largely by a national advertising campaign.

''There's a lot of financial institutions that have departed from the sub-$10,000 unsecured loan segment [of the market] and that's the sweet spot that we've focused on,'' Mr Hughes said. Cashfirst's annualised write-off rate was 10 per cent - down from 11.4 per cent - but customer arrears and write-offs were up slightly, due to ''isolated operational issues''.

Since February, Thorn's share price has lost 25 per cent in value, when it was trading around the $2.27 mark.

Gareth Hutchens
The Sydney Morning Herald
November 23, 2011

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