Having just announced that in the first quarter of 2023 DelfinGroup has increased the issuance of new loans by 58%, year-on-year, while the sale of goods has grown by 43%, the robust fintech aims to become customers' first choice for private financial services, managing a 100-million-euro loan portfolio by the end of 2025. The Baltic Times Magazine spoke to DelfinGroup CEO Didzis Admidins, about the growth.
What do you make of the 58% increase in news loans?
Both the last quarter and the whole of 2022 were good for DelfinGroup. We strengthened our market position and saw high demand for the simple and customer-oriented financial services we provide.
For sure, we continued to develop each of the operating segments – consumer loans, pawnshop loans and trade of pre-owned goods. I want to say that these kinds of services, consumer and pawn loans, are necessary for every functioning economy. We deliver them innovatively and conveniently to meet customers' needs.
In addition, last year we significantly strengthened the management team of DelfinGroup with strong industry professionals and worked purposefully on increasing employee motivation. For example, we launched a staff option program as a part of the long-term motivation program for our employees.
Can you speak of the major milestones you’ve passed by now?
One of our significant milestones was an IPO at the end of 2021, where we raised more than 8 million euros and attracted almost 6 thousand shareholders.
DelfinGroup also has more than 56,7 thousand active customers in the consumer and pawn loan segments. So, we see that clients evaluate our modern and customer-required services.
While one of our strategic priorities is the digitization of our business, we are focused on developing both online and brick-and-mortar services. Over the years, we have developed a solid wide branch coverage. Now we have over 90 branches all over Latvia in our Banknote brand network and an online shop with more than 45 000 pre-owned goods.
You are on Nasdaq, aren’t you?
Yes, we are the largest of four Latvian companies on the Nasdaq Baltic Main List by market capitalization. The public trading of the company's shares was launched on October 20, 2021.
We are also present on the Nasdaq First North market with our bonds. Currently, we have one bond issue listed here. These bonds are unsecured, in the amount of 10 million euros, with an 8% annual coupon rate and a maturity date of November 2023.
The point that we are on Nasdaq is also significant for the investor who is not even investing through the stock exchange because it is a sign of quality. It ensures our transparent operations and corporate governance.
Can you talk about IPO, please?
DelfinGroup has always strived for excellent corporate governance and company operations transparency. Hence, an IPO was the next logical step in our growth. Although we listed our shares at the end of 2021, we were familiar with the stock exchange, as we have been represented there with bonds since 2014.
Going public is a challenging process, both in terms of resources and company management, because you need to look at yourself from the outside to understand what is important to investors.
After the successful IPO – we attracted almost 6 thousand shareholders – there was a sense of a job well done. But it was just the beginning of a new stage in the company's development. The additional financing attracted allowed us to efficaciously refinance existing bonds with lower interest rates and continue to develop business segments and achieve set financial goals faster.
What are your business segments?
We have three business segments: consumer lending, pawnshops and retail of pre-owned goods. One of the keys to our success is the ability to connect these segments well, from which both customer and business efficiency are gained.
How did the market change over the years?
Both consumer lending and pawn loan segments in Latvia changed significantly during the last ten years. The market improved step-by-step. Now the market is regulated, licensing is required to be a part of it. Because of that, the market has consolidated, industry standards have risen, and only the best players and services are left. We have worked on the infrastructure of our Banknote brand to gain great online and offline channel synergy. Now, each branch of Banknote is a modern place for receiving goods and services, and we have a solid online presence.
If we are talking about sales of pre-owned goods, consumers have become more reflective about their lifestyle and its influence on nature over the years. A circular economy concept is an excellent way to maximize the value of goods by increasing their life cycle. For this reason, DelfinGroup has developed the Banknote format offering in-person and remote opportunities to sell or buy useful goods for secondary use. For example, on April 13, we opened the largest store of pre-owned goods, Banknote XL, in Riga, with an area of 300 m2 to provide people with an even more comprehensive range of pre-owned and verified goods in one place.
Is DelfinGroup the right company for investment?
First, DelfinGroup is a stable company with growing business volumes and a proven business model. We have an impeccable track record of being profitable for 13 years since our founding. All our business segments are necessary to people in all economic cycles, and we have a broad and loyal client base.
Secondly, we are a company with strong values. As a public company, we fulfill all requirements related to excellent corporate governance standards and the transparency of company operations.
And finally, we are one of the rare companies in which you can invest in 3 ways – shares, bonds and on the Mintos investment platform.
Since 2013 DelfinGroup has shown a great track record as a bond issuer – we have already successfully paid back five bond issues. We currently have three active bond issues in a total amount of almost 24 million euros, one listed on the Nasdaq First North market, but the other two are private placements.
Indeed, I should mention our unique dividend policy for Baltic states. We pay our shareholders up to 50% of the company's profit in quarterly dividends.
It seems you’re focusing on paying dividends, and they are substantial, aren’t they?
Before entering the regulated market, we promised to pay quarterly dividends of up to 50% of the quarterly profit. And we have kept our promise so far. In the last 12 months, DelfinGroup paid 5,5 million euros in dividends or 0.121 euros per share, which provided the company’s shareholders with a very good dividend yield of 8.1% based on the share price on 17 April 2023.
Where do you see DelfinGroup next?
By continuing targeted technology and product development, DelfinGroup aims to become customers' first choice for private financial services, managing a 100-million-euro loan portfolio by the end of 2025.
In addition, considering the advantages of the unique infrastructure and global trends, DelfinGroup aims to become the leading circular economy promoter in Latvia, promoting the circulation of pre-owned goods. Therefore, our goal is to double the retail turnover by 2025 compared to 2022.
DelfinGroup has already significantly changed the industry by introducing a modern approach to providing pawnshop services. DelfinGroup aims to strengthen its leadership positions and transform the pawnshop industry in Latvia, developing the pawn shop product in a digital environment.
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