RED DEER, Alberta — While acknowledging that the company "struggled" with the goals it set out to achieve in the most recently completed fiscal year, RIFCO president and chief executive officer Bill Graham highlighted successes the Canadian non-prime lender had in fiscal-year 2010 and called the period's results "more favorable." 

This was part of the company's 2010 Annual Report, which was released earlier this week. Among other items, it also included the objectives for the fiscal year ending March 2011. 

Commenting on the fiscal year, Graham shared: "In absolute terms, RIFCO did not have a great year. As our funders demanded higher rates from us, our cost of funds increased. We were forced to pass on substantial rate increases to our borrowers. These higher rates restricted our new loan volume. 

"Overall car sales in Canada declined. At RIFCO we also witnessed a drop in the average credit quality of new credit applications received," he continued. "We maintained our credit standards, and loan closure rates suffered. RIFCO's delinquency and loan loss rates increased as unemployment in Canada increased. Volumes, revenue, credit performance, and profits all were reduced. This past period was difficult."

There were four objectives set for the 2010 fiscal year (with actual results in parenthesis), as listed by RIFCO: 

—Maintain loan originations of over $40 million. (The company had loan originations of $29 million, which was softer on a year-over-year basis)

—Grow managed assets by 40 percent to over $70 million. (Managed finance receivables under management were at $56 million, just a slight uptick from the prior year.)

—Maintain revenue of over $12 million. (RIFCO brought in $11 million in revenue, which was a year-over-year dip.)

—Achieve managed finance receivables annualized write offs between 5.5 percent and 6.5 percent. (The company's annualized loan losses came in at 5.9 percent for the year)

"In absolute terms, we struggled with the objectives for the year," Graham shared. "In relative terms, the year's results are arguably more favorable. In fact, there is some very good news in the year's results."

For instance, Graham pointed to delinquencies coming in at 4.55 percent after hitting an apex of 5.76 percent in the middle of the year. The company also kept loan losses in the parameters they had set and had a healthier operating expense ratio, among other positive metrics shared by Graham.

He also said the outlook for the coming year is better than what things looked like heading into fiscal-year 2010.

"The uncertainty that I wrote about in last year's message was real. The external challenges were daunting at that time. I am far more positive and optimistic in regard to looking forward this year," Graham noted.

The following were the four objectives RIFCO set for the fiscal year ending March 2011:

—Achieve record loan originations of over $50 million.

—Achieve record managed assets of over $75 million.

—Achieve record revenue of over $14 million.

—Achieve an annualized write-off rate below 5.5 percent.

—Achieve record net income of over $1.5 million

"In order to achieve these objectives, we have lots of work to do," Graham noted. "RIFCO must focus on creating exceptional relationships with great dealers. The company is pursuing specific initiatives that will improve our day-to-day interaction with our dealers. This will increase the quality and quantity of loans we generate at each dealership."

He added: "Identifying new like minded dealers remains a priority. RIFCO will grow the size of its dealer base this year. RIFCO must achieve improved capital solutions. RIFCO will work to leverage its validated credit performance for improvements in structure, and pricing with each of its funding partners."

The company noted that it will host its annual shareholders' meeting next month. The meeting is scheduled for 3 p.m. (MST) on Sept. 9 at the Red Deer Lodge in Red Deer, Alberta.