Western Financial net income up 537% in first quarter

Alberta-based broker network and bank Western Financial Group (TSX: WES) is reporting net income for the first quarter ending March 31, 2004 hit $784,000, a whopping 537% increase over a year ago, when the company reported income of $123,000. This translates to earnings per share of $0.03 for the most recent quarter, versus break-even a year ago.Most of this growth comes from the company’s core brokerage business, which saw revenue grow to $7.9 million for the first quarter, compared to $6.1 million a year ago. EBITDA was up to $1.9 million from $1.3 million a year ago in the core business, offsetting losses in the relatively new banking unit.Bank West, which commenced operations at the beginning of 2003, brought in revenue of $163,000 for the first quarter of this year, more than 230% growth over the $49,000 reported a year ago. However, the bank posted a loss of $171,000 for the most recent quarter, compared to a loss of $131,000 last year.Overall Western’s revenue was up 32% in the first quarter of this year at $8.9 million, against $6.7 million a year ago.However, the company is bracing for legislative reforms which could reduce revenues to its brokerage business moving forward. “While we continue to see increases in premium costs early in the second quarter, we expect to see prices flatten later in the year as the Alberta auto rate freeze takes effect,” notes a company statement. Growth will have to come from increased marketshare, with same-store customer count up 3% on an annualized basis in the first quarter. The company’s mutual fund business is currently in start-up mode, and will require subsidization for “at least the next few quarters”. Its investment in Jennings Capital is already producing strong returns.Overall, the company is on-track to achieve its yearend targets, the statement notes.