Chesswood Reports $32.7MM Pre-Tax Income for 2018, Up 17% Y/Y

Commercial equipment finance provider Chesswood Group reported its results for the fourth quarter and year ended December 31, 2018.

Finance receivables exceeded $900 million for the first time, while the company had an annual originations record of $400 million, 16% ahead of 2017’s originations.

“Once again we had an extremely busy year that culminated in our eighth successive year of record operating income and originations. If not for last year’s one-time $9.4 million tax recovery due to the U.S. Tax Cuts and Jobs Act, this year’s net earnings would also have been another record,” said Barry Shafran, Chesswood president and CEO.

“Our shareholders have relied on us for sustainable dividends for more than a decade. In 2018 we paid out $15.1 million in dividends, providing our shareholders with an annual yield of 7.65% based on our average share price in 2018 of $10.98. Just as importantly, the percentage of our free cash flow that we paid out in dividends was approximately 65% at the end of the fourth quarter” Shafran said.

2018 operating income also included the interest expense on $20 million of additional revolving debt that was used to retire the company’s convertible debentures in early January 2018. Interest on the convertible debentures was not included in the calculation of operating income in prior years. The additional interest included in operating income in 2018 totaled approximately $900,000, or $225,000 a quarter.

Through three wholly-owned subsidiaries in the U.S. and Canada, Chesswood Group is a publicly-traded commercial equipment finance company focused on small and medium-sized businesses. Its subsidiary, Pawnee Leasing, finances a highly diversified portfolio of commercial equipment leases and loans through relationships with over 600 independent brokers in the U.S.

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