Silver Chef feels heat as shares plunge
Shares in financing company Silver Chef have plummeted after the company joined other non-bank lenders in downgrading its profit for the full year.
The company, which specialises in leasing kitchen equipment to restaurants and cafes, has long been a favourite among investors due to its high growth rate.
On Thursday its shares plummeted 28 per cent after it warned its profit would be 10 per cent to 15 per cent lower than expected.
The downgrade follows a string of other share price falls by small-listed, non-bank lenders, including Cash Converters and Radio Rentals owner Thorn Group.
The company said in a statement that the lower guidance was due to slower asset acquisition within its GoGetta business, which leases commercial equipment such as trucks and machinery to small businesses.
"The company has implemented a number of initiatives to stimulate growth and has observed a recovery over recent weeks," it said.
Both Silver Chef and Cash Converters have been the beneficiaries of non-bank credit themselves through corporate bonds held with fund manager FIIG.
Silver Chef raised $30 million last year through the six-year bonds at 8.5 per cent.
The company is expanding its brand into Canada and is in the process of acquiring a new processing centre in Melbourne. It said its hospitality business continued to perform in line with expectations.
Cash Converters shares fell in October after the company was hit with a $40 million class action alleging thousands of its customers had been caught by exorbitant interest rates.
The corporate regulator has also moved to crack down on pay day lending. Silver Chef shares closed at $5.30.