Q: CashMoney, LendDirect parent company has filed for creditor protection. What is your interpretation of how this will impact Go Easy? Is it positive and why, or is it a watch out that problems exist in GSY which has been trading lower the last month? Thanks again - John C
5i Research Answer:
CURO was not profitable in the past couple of years and had far too much debt. It had a funding crunch. GSY is significantly larger, and has more diverse funding. While they had some overlap in Canada, most of CURO's business was in the US. Still, there is $300M in revenue that is no longer supported in Canada, and to that extent it is likely positive for GSY. GSY has stronger fundamentals, but is not immune to market forces. But we have no particular cause for any additional concern from this.