General Finance Release Earnings

Mobile storage company General Finance (NASDAQ:GFN) has released earnings today. We mention this because they have high yield offerings that we have potential interest in.

GFN has a 8.125% senior note maturing in 2021 trading under the ticker GFNSL which is trading in the $25 area. Further info is here.

Additionally GFN has a $100 perpetual preferred with a 9% coupon trading under ticker GDNCP which last changed hands at $101. Further info is here.

The earnings from GFN were satisfactory from a dividend safety perspective as revenue rose and there is reasonable free cash flow, but the company shows a GAAP loss.

Companies like General Finance are fairly dicey companies during difficult economic times, but are able to stay afloat when times are good. The company has a very large chuck of their business tied to oil and gas and thus this heavily influences revenues.

The balance sheet is pretty heavily leveraged–and this is the part that can kill this company in real tough times. Debt is 3X equity, which works during the good times–during a recession not so well.

The company press release is here.

4 thoughts on “General Finance Release Earnings”

  1. I have been long both GFNSL (senior note) and GFNCP (cumulative preferred) for many years. GFNSL is due 7/31/2021 and currently callable at 102.031% of $25/par for 2019 and at $25 beginning in 2020. The preferred GFNCP is currently callable at $100 par and if (G-d forbid) they miss 2 consecutive payments the 9% coupon goes up 2% annum On each subsequent dividend payment date on which dividends are not paid, the dividend rate will increase by an additional 2.00% per annum, up to a maximum annual dividend rate of 19.00%. Please do your OWN deep due diligence which may include reviewing their earnings reports, deciding if the reward is worth your risk, calling the company and speaking to a representative:
    General Finance Corporation
    39 East Union Street
    Pasadena, CA 91103
    United States
    626-584-9722
    http://www.generalfinance.com
    Smile, Nomad

    1. Hi Nomad–I don’t see problems until we head into a real soft economy–who knows when that will be.

  2. Good morning Tim, General Finance seems to be growing quite well in North America where is generates most of its revenue. Its the Asia Pacific component which seems to be dragging. Ironically, their brands in Australia dominate the market while in North America they face more competition. I own some of the baby bonds and have been satisfied with their performance.

    1. Hi Citadel–yes, but debt loads are very high–which may matter in the future. I would not be afraid to own it at the current time.

Comments are closed.