Interested to see your post and would certainly welcome any thoughts you might have on AFC.
I first researched this company at the time of the float and thought it looked good for a quick trade. Unfortunately, all the shares were taken by clients of the sponsoring broker leaving not a lot for the rest of us. It then came on my watchlist as it dropped below 40 cents and I managed to pick a few up around 36...
Obviously this is a small company with not a great deal of shares on issue, trades on small volume and has a substantial shareholder (~45%) being a company associated with Martin Kane the CEO. As such it doesnt have a lot of scope to publicise itself or its activities!
It has a great business with in-built revenue growth as it provides insurance premium funding. As companies insurance premiums go up (have a look at the charts of listed insurance companies on the ASX!), AFC's revenue goes up. It has also been very keen to expand into lease funding particularly with its diversification into the Eastern States.
This expansion and growth has come at a price. It has had to fork out for new systems and develop new client bases which take time and capital to do. Based on the half yearly results however, this investment is starting to pay off.
Rising interest rates are a threat, as this is how AFC finances its funding activities, but the cash generation is strong and management seems to have a good grip on the business. Although some of the forecasts prepared at prospectus time may have been a little fanciful!
I like to think AFC may come onto the radar screen of a small companies fund manager looking for some growth options once it has proven itself to be a stable earner. I think this years full financial statements may do this.
Anyway, just a few midday musings on a gloomy UK day! I will keep an eye out for your post...
