Asset finance leader reports record results despite global headwinds

Asset finance leader reports record 2022, COG Aggregation

Huge broker volume growth for COG Financial Services Limited

Australia’s biggest asset finance broker and aggregator, COG Financial Services Limited (ASX:COG), parent of Platform Finance and Consolidated Finance Group, has reported a record 12-months as asset finance demand continues to boom.

In FY22, COG recorded record broker volumes: they jumped 30 per cent to $6.7 billion, compared with $5.1 billion in the previous financial year. “That’s astounding growth. It really shows how resilient the sector is and that a record number of businesses invested in new vehicles, equipment and machinery during the year,” says Ryan Young, Platform Finance CEO.

“The sector has truly defied expectations that the pandemic would throttle asset finance. Transport, construction, agriculture, forestry and infrastructure/civil works have all been performing strongly, which has led to a surge in asset purchases. Consumer lending has also been buoyant over the year, with people purchasing private motor vehicles, caravans and boats, spending on home improvements, and consolidating debt.”

COG now has a 21 per cent share of the market, which means one in five assets financed during the last financial year was arranged by a member of the group. “Despite supply chain disruptions, fuel concerns, border restrictions and other global ructions, demand for asset finance has grown year on year, as demonstrated by our results over the past six years. And in the past year alone, our broker network outperformed the market by at least two-times, which really proves we are partnered with the best. This both reflects and reinforces our commitment to helping them succeed and take market share, and it gives us the confidence to redouble our investments in the sector.”

COG’s scale enables it to continue investing in three key areas: technology, staffing and product. Young points to Westlawn, the group’s in-house finance company, as a perfect example. “Our scale allows us to make this a fully-fledged finance company rather than just another while label – and it’s exclusive to our broker network,” he says.

Westlawn provides a three-fold benefit:

  1. Providing an extra option to COG brokers;
  2. Filling gaps in the group’s lending panel;
  3. A key point of difference is that Westlawn is deposit-funded, which means it isn’t constrained by wholesale funder policies and can lend money where it makes sense to do so.

“The more our brokers grow, the more we can grow that service,” says Young. “The same dynamics apply to staffing, complementary products (e.g., novated leases, car buying and insurance), and to technology. COG is fully focused on asset finance – and if this run-rate continues, it means we can continue to invest and provide our brokers with more and more of what they expect and need to boost productivity and separate themselves from the competition.”

Asset finance emerges from the shadows

Young says the results also show that asset finance “has finally come out of the shadows”. “Asset finance has always been strong, but the sector has largely been invisible. Not only does COG give the sector an identity, but our results also highlight the strength of the market and show other investors, including funders, that this is a sector worth investing in,” he says.

“There have been some interesting trends in recent times, including an increase in mergers and acquisitions. We are certainly on the acquisition trail to identify more opportunities to further grow our broker network and continue to enhance our service offerings for both COG brokers and independent network member brokers.”