Shares in consumer leasing business Thorn Group Ltd (ASX: TGA) crashed around 20% to $1.40 this morning after the company announced the closure of its TFS Consumer Loan business and a write off in book value of its debt collection business. Its NCML business will take a $6.7 million write off in goodwill attributed to the original purchase value of the business.

As a consequence the group’s full year reported net profit is expected to be in the range of $19 million to $21 million, although underlying or adjusted group revenue and earnings are still expected to be up marginally over the prior year.

The company expects that the capital released as a consequence of the decision to close the TFS business can be put to work at higher returning divisions, although the short-term pain is being reflected in today’s share price falls.

Thorn’s primary businesses are its Radio Rentals consumer-leasing brand and a small business lending operation, with the chief executive prioritising growing these businesses over the long term.

After today’s price falls the stock trades on around 8x earnings per share with a dividend yield in the region of 8%, which makes it cheap on traditional valuation metrics.

However, it still has some regulatory risk regarding the government’s review of small amount credit contracts, which may be in part why the stock trades on such undemanding earnings multiples.

Other businesses in the consumer lending space investors could consider include Money3 Corporation Limited (ASX: MNY) or Cash Converters International Ltd (ASX: CCV).

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The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.