Pawnbroking chain and micro-loan provider Cash Converters International Ltd has raised its annual profit guidance after four months of strong trading.
It also plans several franchised store acquisitions in Australia.
The company says its net profit target for the current financial year is between $20.5 million and $21 million, up from the previously forecast $18 million to $18.5 million.
Its unaudited net profit for the first four months of the 2010 financial year is $5.9 million or 11.6 per cent higher than budget, the company said in a statement on Wednesday.
Cash Converters said the strong trading was driven partly by 23 per cent growth in its personal loan book to $26.3 million during the four-month period.
This followed loan book growth of 55.1 per cent to $21.4 million for the full 2008/09 financial year.
Managing director Peter Cumins said there had been a very positive start to the current financial year and the company was "well placed to continue to grow the business in the second half".
"The soft launch of our financial service products in the UK in October has been encouraging and we have a number of potential franchised store acquisitions in mind in Australia to continue the growth momentum," Mr Cumins told Cash Converters' annual general meeting in Perth on Wednesday.
Group legal counsel Michael Cooke told AAP that the company was effectively reverse franchising, whereby it bought stores from franchisees.
Franchising had been an ideal way to start the business in 1984, allowing it to use external funding to grow, but now that the franchisor was in a strong financial position, it sought to acquire those stores.
Mr Cooke said this would "deliver much higher earnings before interest and tax than by way of franchisees".
The company bought three franchised stores in the UK during the first four months of 2009/10 and the profit contribution from the stores will provide an uplift to full year earnings.
Mr Cooke said the company had about 280 stores in the UK and Australia, about 40 of which had been bought from franchisees, so there was potential for 240 further acquisitions.
The company would first target multi-store owners operating in a distinct region, he said.
Cash Converters has about $59 million in available cash resources and says it is well placed to fund the loan book to increase the penetration of its financial service products both in Australia and the UK.
Shares in the company were up 3.5 cents, or 6.31 per cent, at 59 cents.
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