DLLR
Own and operate storest that provide cash checking,
short-term consumer loans, money orders/transfers,
electronic tax filings, bill payment, foreign currency
exchange, photo ID and prepaid local and long-distance
phone services. DLLR owns 1088 stores, and works with
354 franchisees/associated merchants in the US, Canada
and the UK. DLLR is based out of Berwyn, PA and
trades on teh NASDQ.
~50% of DLLR’s revenue derived from Canada, 25% from
the UK and 24% from the US.
Canadian regulatory process is caping the payday
lending industry. This is a positive advancement as
DLLR is already the low cost provider and cap rates
will increase DLLR’s competitive position.
Manitoba was first Canadian provice to set a rate
structure on payday lonans. The rate is 17% on first
$500, 15% on $501-1,000 and 6% from $1,000-$5,000.
Another provision is that rates apply to the
borrowings up to 30% of consumers’ net pay; above 30%,
the rate falls to 6%, which is meant to discourage
payday lenders from lending too much (predatory
lending).
This, in fact, gives DLLR room to raise rates in
Canada. DLLR currently charges 13%-14% per check
cashing fee.
Trading at 10.3x 08 EPS, which management indicating
32% growth in annual operating EPS.
