Thorn Group Ltd New initiatives to impact margins in the short term
New initiatives to impact margins in the short term: Thorn Group Ltd (ASX: TGA) has recently made additional provision in its accounts with respect to compensation that may be payable to customers who did not meet minimum income thresholds for their contracts. Further, negotiations with ASIC have reached a point where it anticipates that ASIC will seek a civil penalty and require further compensation and remediation. Considering this, TGA highlighted for a further provision with a $4 million profit after tax impact in its financial statements for the year ending 31 March 2017. Accordingly, the group expects net profit after tax for financial year ending March 31, 2017 to be in the range of $24 million to $26 million. TGA is also setting itself to defend against a class action to be commenced with regards to its past lending practices. For the 2017 half year, TGA’s revenue rose by 2.8% while the group stated that the implementation of its business plan has been proceeding with the sale of NCML and gradual book run off of the consumer finance book releasing funds for reinvestment into the core businesses which generate improved rates of return on capital and have growth prospects.
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