Fintech lender MONEYME delivers record revenue and statutory profit for the half, while improving credit quality
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MONEYME’s robust half saw the company deliver record revenue and profits as it focuses on managing credit risk through a higher quality credit book.
In the first half, non-bank lender MONEYME’s (ASX:MME) shift in focus from high growth to an earlier realisation of cash returns has resulted in a return to statutory profits ahead of target.
MONEYME’s key metrics for the half looked very solid as the company delivered record top and bottom line figures.
Highlights for the half include a record statutory NPAT of $9m, which was a 147% bump from the same period a year ago, while gross revenue was a record $121m, a 152% increase on the pcp.
MME saw a 110% increase in closing of gross customer receivables to $1.237 billion compared to the previous comparable period.
The company’s average Equifax credit score increased by 6% to 714, which is ranked as “good” by Equifax.
Overall, the company has increased its net assets by 444% on pcp to $122m during the half.
In response to rising interest rates and tightening capital markets, MONEYME has slowed its new business originations to preserve cash balances and reduce funding requirements.
The company’s core operating expenses are also being reduced in H1, driven by economies of scale and the realisation of substantial cost synergies from migrating SocietyOne’s technology onto MONEYME’s proprietary technology platform, Horizon.
The credit risk profile of MONEYME’s loan portfolio has also continued to improve compared to the pcp.
This reflects the company’s strong focus on credit risk management in response to the uncertain macroeconomic environment by focusing on high credit quality customers.
MONEYME also reduced its credit risk by diversifying, while protecting its net interest margins (NIM) through customer pricing updates.
“At the start of the financial year, we announced our intention to moderate growth to prioritise building profit and lowering our credit risk,” said CEO, Clayton Howes.
“I am pleased now to say that our shift from high growth to profit delivery has been swift and disciplined, achieved through proactive cost optimisation, prudent credit risk management, and customer pricing adjustments to preserve risk-adjusted returns.”
New features were added to its core offering during the half, including a pilot of a new, interactive feature of its Autopay product, Autoscan.
The AutoScan feature enables customers to access loan and repayment details for vehicles on the showroom floor, simply by scanning the registration plate of any vehicle on display.
“Autoscan is set to transform the car buying experience by giving the customer control and visibility of their financing options at the point of sale.”
The first half also saw the MME expand its product range with MONEYME Credit Score, which attracted more than 37,000 users during its trial phase.
Howes believes the app-based, free credit score service will generate significant customer and cross-sell value for the group going forward.
“The launch of our app-based credit score product will help us build stronger relationships with our customers and capture new business opportunities,” he said.
Meanwhile, funding has been top of mind not only for MONEYME, but the lending sector in general.
On that front, the company is progressing a strategic capital initiative, assisted by a leading investment bank, to provide the Group with the capital required to take advantage of its growth opportunities and to partially repay a corporate debt facility.
The initiatives under consideration include a range of corporate transactions, with ongoing engagement with interested credible parties.
Meanwhile, the company has made solid progress in its ESG footprints by launching several initiatives during the first half.
This includes increasing female representation on its Board of Directors to above its target of >30%, amending its Constitution to cement ESG values into company decision-making, and submitting its application for B Corp Certification.
With regards to B Corp, MONEYME has aligned its ESG efforts to the B Corp framework since the beginning of FY22.
The B Corp application marks an important milestone and while the company awaits certification, MONEYME calculates its B Impact Assessment score as 93.2 at 31 December 2022, well above the minimum 80-point threshold.
“In the half we have continued our focus on innovation, while making significant progress on our ESG agenda,” said Howes.
“We are proud to have submitted our application for B Corp certification, reflecting our long-term commitment to having a positive impact on society and the planet.”
Looking ahead, Howes says he is optimistic about the future of the industry and sees significant potential for growth in all key verticals, particularly in the auto financing market.
“Our priorities for the remainder of FY23 include positioning the business to take advantage of these opportunities and strengthening our balance sheet via the strategic capital initiative, and through continued revenue flows with a gross revenue projection of >$220m for the full year.”
This article was developed in collaboration with MONEYME, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.