The stock of Goeasy (GSY), a Canadian financial services firm, fell 60% after management suspended its quarterly dividend payment.
The company had previously paid a quarterly distribution of $1.46, giving the stock a yield of 11.75%, one of the highest on the Toronto Stock Exchange (TSE).
Goeasy, which specializes in subprime consumer lending, also announced that it would take more than $200 million in charges in its fiscal fourth quarter and withdrew its forward guidance.
The Toronto-based company said it expects to take a $178-million charge for bad loans related to its LendCare business and a related write down of $55 million for loan interest and fees.
Goeasy also expects an increase in credit losses on gross consumer loans for fiscal Q4 of $86 million.
Finally, the company announced that Felix Wu has been appointed chief financial officer (CFO), effective immediately. Wu has been in the job on an interim basis since last September.
The actions being taken by Goeasy were part of a pre-earnings announcement. The company is expected to release its fiscal fourth-quarter financial results on March 25.
Goeasy operates three business units – easyfinancial, which offers loans to subprime borrowers; easyhome, which sells furniture on a lease-to-own basis; and LendCare, a provider of point-of-sale consumer financing.
Last September, Goeasy reported a consumer loan portfolio of $5.44 billion.
GSY stock has declined 62% over the last five years to trade at $49.72 in Toronto.
