While FY21 was big, MME has laid the groundwork for even stronger growth this year in one of Australia’s fastest growing fintech sectors.

Fintech lender MoneyMe (ASX:MME) has confirmed FY21 was a transformational year for business growth with a huge set of full-year numbers this morning.

Highlighting the result was a 115% increase in new loan originations to $384m, which flowed through to record revenues of $58m and an after-tax cash profit of $12m.

And as loan growth accelerates into FY22 across multiple product verticals with an expanded funding base, MME has laid the groundwork to become a major competitor in a fast-growing sector.

 

By the numbers

As evidence of MME’s operational momentum, the company closed out FY21 with $333m in gross customer receivables, a massive 149% increase on FY20.

Compared to other fintech sectors such as BNPL, a key advantage of fintech lending is that new loans underpin medium-term revenue growth over the term of each contract.

In that context, MME’s future contracted cash interest rocketed to $98m – more than three times higher than FY20.

And as lending growth accelerated, MME also focused on the quality of its loan book, increasing its average customer profile on Equifax to 650 and reducing loan impairments by 18%.

While those growth rates in revenue and cash flow were impressive, MME achieved all of it with a material step-change in its operating margins, after securing major expansions to its existing warehouse funding facilities.

For FY21, those cost savings flowed through into a cash net profit of $12m. And with loan originations growing rapidly off a lower cost base, the company is now placed to drive even higher profit margins in the years ahead.

 

Operational highlights

The numbers demonstrate that MME has gained traction with a loyal customer base.

And amid those tailwinds, CEO Clayton Howes and the management team also executed on a number of successful product initiatives as the company builds market share in fast-growing new verticals.

Among those products was the launch of Autopay, MME’s innovative drive-away vehicle financing solution that can issue loan approvals within 60 minutes.

Already MME’s fastest-growing new product channel, Autopay was only launched in the fourth quarter of FY21, which means investors can be optimistic it will provide a major contribution to FY22 returns with a full year of operations.

The company also launched its MoneyMe+ solution, which provides a gateway for retailers to offer MME loans at the point of sale – an innovative product in a market that is “mostly still left to the traditional non-banks to service”, MME said.

And helping to underpin all of that growth is Horizon, MME’s proprietary, cloud-based technology platform that leverages real-time data to improve efficiency and streamline loan approvals.

While today’s full-year results provide confirmation of MME’s business momentum, investors have already started taking notice.

MME shares have ripped higher over the last three months from around $1.40 to consolidate above $2.48.

More broadly, Australia’s multi-billion dollar consumer lending sector is still in the early stages of fintech disruption as major banks move back, being replaced by innovative, tech-savvy competitors.

In that environment, MME is now poised to become a major player in one of the country’s fastest-growing fintech sectors.

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.

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