Thorn Group share price surges 30% on quarterly report

The Thorn group share price surged 30% on Friday following the release of the company's quarterly report to June 30, 2020.

| More on:
wooden blocks with percentage signs being built into towers of increasing height

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Thorn Group Ltd (ASX: TGA) share price surged 30% on Friday to close the day at 13 cents. The rise in the Thorn Group share price came following the release of the company's quarterly report.

What was in the announcement?

The company announced that the closure of its Radio Rentals stores was completed. According to Thorn group, the company had initially closed its stores temporarily due to the coronavirus pandemic, later deciding to close them permanently. The store closures were completed at the end of May 2020 with significant redundancies occurring as a result. The company's Radio Rentals business now utilises a purely online model which onboards customers digitally. Progress was made towards the development of this new structure during the second quarter of 2020.

Thorn reported that its business finance division faced difficulties during the second quarter of 2020 due to reduced cash repayments from customers. The company is in discussion with the lenders of its warehouse funding trust about relief options.  

In the June quarter of 2020, Thorn Group had positive cash flow of $45.5 million. This came as receipts from previously written lease contracts exceeded operating expenses and outgoings for new leases.

Thorn Group paid off $21.3 million of debt funding in the June quarter along with $2 million of its corporate debt facility. 

The company is currently undergoing cost reductions and collecting receivables from its Radio Rentals business after remodelling this division into an online business. It expects both these initiatives to be cash positive for the group. 

At the end of the June quarter, Thorn Group had $71.8 million in cash. This compared to $49.6 million cash at the end of the March quarter.

About the Thorn Group share price

Thorn is a financial services company that provides leasing and financing to consumers and businesses.

In December 2019, Thorn Group settled a class action brought against the company for $25 million. The class action was related to the previous lending practices of its Radio Rentals business.

The Thorn Group share price is up 333% from its 52 week low of 3 cents, however, it is down 40.9% since the beginning of the year. The company's share price is also down 53.6% since this time last year.

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. 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 Scott Phillips.

More on Share Market News

Four people on the beach leap high into the air.

Here are my top 4 ASX shares to buy right now

Here are the four ASX shares I would buy today if I won the lottery.

Read more »

Lion roaring in the wild, symbolising a rising Liontown share price.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors once again pulled back from record highs today.

Read more »

Good news has these businesspeople cheering for joy, partying in a board room.
Bank Shares

2 uniquely Australian reasons why ASX 200 bank shares are outperforming global peers

Three of the Big Four ASX 200 bank shares hit new price milestones today.

Read more »

A group of friends party and dance in the desert with colourful confetti all around them.

ASX 200 to finish 2024 higher than expected: AMP

AMP says there were 3 factors that drove the ASX 200 to its new record high above 8,000 points this…

Read more »

a line up of job interview candidates sit in chairs against a wall clutching CVs on paper in an office setting.

Why did the ASX 200 dip on the latest unemployment figures?

The labour market remains stubbornly resilient with only a minute increase in unemployment last month.

Read more »

Man holding fifty Australian Dollar banknote in his hands, symbolising dividends, symbolising dividends.
Share Market News

Buy these top ASX ETFs for income in FY 2025

These ETFs could be worth a look if you're searching for income.

Read more »

A woman ponders over what to buy as she looks at the shelves of a supermarket.
Consumer Staples & Discretionary Shares

Have ASX investors missed their chance to buy Woolworths shares?

After a sharp recovery, Woolworths shares might not be on sale anymore...

Read more »

A rueful woman tucks into a sweet pie as she contemplates a decision with regret.

DroneShield shares taught me a $29,612 lesson. Stick to your guns

If only I knew what I know now, I'd be $29,612 better off.

Read more »