Failure to disclose07 June 2013
Cash Converter's (ASX:CCV) share price has received a battering over the past couple of weeks. It was only after a reverse speeding ticket from the ASX did they come clean.
Due to the new Consumer Credit Legislation Amendment (Enhancements) Bill 2012 which commenced 1st March, applying for cash advances have gotten more complicated process wise for both consumers and staff. As a result, cash advances are down 2.4%, 26.3%, 12.6% over the past three month against the average. Short term profit is impacted, longer term management thinks personal loans will make up for the dip. Read the full announcement here.
Being one of my larger holdings, I'm somewhat peeved. Not so much for these circumstances, but management's failure to fulfill their continuous disclosure requirements. It's quite evident that they were aware of the 20%+ drop in cash advances for April more than a month in advance. Yet they waited until the news trickled out, the share price slumped, and for the ASX to come knocking before giving a yelp.
All this will probably end up just being a short-term impact to profitability, but it leaves a undeniable bitter taste. Certainly not the most transparent management team around.
CCV last traded at $0.99, at one stage hitting a low of $0.82.
Disclosure: At the time of publishing I own shares in CCV.