Thanks to continued growth in Mexico, coupled with increasing branch office efficiency with consolidation, Greenville-based World Acceptance Corp. posted gains in net income and total revenue for its fourth quarter.
The consumer lending company increased its net income by 6.8% to $31.9 million compared to $29.8 million in the previous fiscal year. Total revenue increased year-over-year by around $500,000 to $144.6 million, according to the company’s filing with the Securities and Exchange Commission.
“For Q4 FY 2017, we were again able to increase the number of new and returning customers that we added to our base compared to the same quarter a year ago,” said Janet Lewis Matricciani, CEO of World Acceptance, in a call with investors Wednesday. “We consider this a very positive sign toward the future growth potential of the company. Furthermore, we have consistently improved new borrower and former borrower solicitation and have a solid plan for continued improvement in FY 2018.”
A decrease in average earning loans and “unfavorable moves” in exchange rates forced the company’s interest and fee revenue to drop $2 million year-over-year.
World Acceptance Corp. reported closing 13 branches during the quarter with most of those branches merging with branches in the same town. Matricciani told investors the expectation is “the number of closures will be significantly reduced” going into FY 2018. Between the U.S. and Mexico, the company has 1,327 branches, a 1% decrease from FY 2016.
In Mexico, the company’s gross loans increased by 13.7% in U.S. dollars and 23.5% in Mexican pesos.
“We are pleased with our continued growth in our Mexico businesses,” Matricciani said. “We are also pleased with our operational improvements in the U.S., above all in growing our unique customer base for the first time in four years and shrinking our gross loans much less than a year ago.”
While its fourth quarter was strong, World Acceptance Corp. struggled in the year as net income dropped 15.8% year-over-year to $73.6 million and total revenues were down 4.6% to $531.7 million.
The company also continued its stance that its prior practices were not in any violation of regulations. The Consumer Finance Protection Bureau’s enforcement office is considering legal action against the company for violating the Consumer Protection Act of 2010. Matricciani said the company had no further information to add regarding the potential action.