You are here

Highlights from Liberty Tax Investor Presentation

Adam Rust's picture

Posted December 14, 2012

Some interesting pieces of information from this week's investor presentation made by JTH Holding, the corporate parent of Liberty Tax:

1) JTH says that three funds own approximately half of their shares:

  • DataTax Business Services owns 33.4 percent of common stock. DataTax is located in Virginia Beach, Virginia.
  • EnVest II, LLC, located in Hampton Roads, holds 10.3 percent.
  • Edison Venture Fund IV owns 6.4 percent. Edison Venture's various funds hold positions across the financial services, health care, e-commerce, and information technology sectors.

2) Without RALs, Liberty rolled out the Instant Cash Advance ("ICA") product in 2012 in seven states. The company reports that the

average loan size of an ICA was $2,033. Liberty charged 4.5 points for the loans. For an average loan, that would mean fees of $91.49.

That price exceeded the fees charged for RALs issued by Republic Bank. One catch: JTH has to purchase back any advance that remains unpaid after 60 days.

3) Liberty has now re-defined its business in order to take more revenue with refund transfers. In 2012, Liberty customers that purchased a refund transfer paid a $20 transmitter fee and a $29.95 account set-up fee. Revenue from set-up fees went not to Liberty, but to a third-party. This year Liberty is keeping both the transmitting and the account creation in-house. With that approach, the company says that it will collect a $9 transmission fee and a $29.95 transmission fee.

4) The company says that half of its customers used a bank product in 2012.

5) Franchisee fees are $40,000. Once established, franchisees have to share almost twenty percent of their revenues for royalties and advertising fees.