COG Financial Services : 2021 AGM Chair Address

For personal use only

29 November 2021

The Manager - Listings

Australian Securities Exchange Limited

Exchange Centre

20 Bridge Street

Sydney NSW 2000

2021 AGM Chair Address

COG Financial Services Limited (COG) attaches the following documents in relation to the FY2021 Annual General Meeting:

• Chair Address, by Mr Patrick Tuttle; and
• Presentation associated with the Address.

Announcement authorised by: Board of COG Financial Services Limited

For further information please contact:

Andrew Bennett

Chief Executive Officer

M 0405 380 241

COG Financial Services Limited (COG) has two complementary businesses:

1. Finance Broking and Aggregation (FB&A). Through its membership group of independent and equity owned brokers (brokers in which COG has invested), COG is Australia's largest asset finance group, representing over $5.2 billion per annum of Net Asset Finance (NAF). Further growth is being achieved through organic growth in equipment finance and insurance broking and through equity investment in brokers.
2. Lending. Through broker distribution, COG provides equipment finance to SMEs, and real property loans via its subsidiary Westlawn Finance Limited.

In both businesses COG's market share is small relative to the size of the markets in which it operates, and there are significant growth opportunities through consolidation and organic growth.

For personal use only

COG Financial Services Limited - AGM 2021

Chair's Address

Good morning everyone,

I am pleased to report that your Company delivered an NPATA to shareholders of $19.5 million for the

year ended 30 June 2021, up 132% on the prior year. This was a very pleasing result in view of the year's

challenging trading conditions, which were impacted by the ongoing COVID-19 pandemic.

Significantly, the Company declared and paid a fully franked final dividend of 6.0 cents per share. We also revised the Company's dividend policy to accommodate a payout ratio of up to 70% of NPATA to members.

This FY21 result further cements COG's position as Australia's leading asset finance broking and aggregation group, whilst also delivering profitable and low risk growth in our Lending business through the delivery of competitive mid to near-prime lending products across our national distribution network.

Total revenue in FY21 increased by 21% to $269.8 million over the prior year, largely due to organic growth in commission and fee income from our core Finance Broking & Aggregation ("FB&A") business, and from the acquisition of controlling interests in Westlawn Finance Limited and Access Capital Pty Limited.

Net Assets Financed (NAF) through COG's aggregation businesses grew to $5.2 billion in FY21, an increase of 14% on the prior year. COG's estimated market share of Australia-wide broker originated NAF is now 18%.

Our commercial Lending business experienced a year of significant change with the successful establishment of an unlisted Managed Investment Scheme for efficient funding purposes, the positioning of Westlawn as a key panel lender for the COG Group, the implementation of an enhanced IT lending platform, and the scaling back of the TL Commercial operations (for the purpose of achieving intended synergies from the acquisition of Westlawn). As a result of these various initiatives, the Lending segment delivered a significant contribution to the Group's bottom line in FY21.

Looking forward to the new financial year (FY22), we continue to be laser-focused on our strategy, continuing to search for broker acquisitions that are complementary to our national network, further enhancing our insurance broking capabilities, and reconfiguring our in-house loan funding to a more capital light model.

Following a successful capital raise in October 2021, COG has also recently made several step-up acquisitions in its subsidiaries.

This has included increasing our ownership stake in Westlawn Finance Limited from 51% to 75% on 1 November 2021.

The Westlawn business provides COG with a unique platform from which to generate competitive and capital efficient funding, which will continue to underpin future growth in our own-branded lending book. This will in turn deliver a diversified source of future earnings in the form of management fees and net interest margin.

COG also acquired the balance of shares in Platform Consolidated Group Pty Limited (PCG) previously held by foundation shareholders and management. Following the completion of this transaction on 1 November 2021, PCG became a wholly owned COG subsidiary, which will enable synergies across the Group to be realised in a shorter time frame.

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In closing, I would like to personally thank all of our shareholders for your continuing support and encouragement. Finally, I'd like to thank Andrew Bennett and his senior management team, along with my fellow Directors for their tireless efforts and support over the past year. I'll now hand you over to Andrew who will take you through some of the key areas of strategic focus as we move our attention to the year ahead.

Thank you.

Patrick Tuttle

Chair

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Chairman's Presentation

Annual General Meeting

COG Financial Services Limited

Chairman- Patrick Tuttle

• 2 9 N o v e m b e r 2 0 2 1

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FY 2021 Highlights

finance broker distribution network

• Acquisitions completed for controlling interests