MONEYME pops 26pc as funding structure approved; on track for over $200 million FY23 revenue
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Special Report: Investors have reacted favourably to positive MONEYME news today, sending its share price up 26% following an update to its corporate debt arrangements.
Digital non-bank lender MONEYME (ASX:MME) has updated the agreement with its corporate debt provider, Pacific Equity Partners (PEP), while confirming it’s on track for greater than $200 million in revenue and statutory profits in FY23.
The announcement saw MME’s share price jump 26% to 29.5 cents, before settling at a 15% increase at 27 cents by market close. MME’s current market cap of $65.85m means the digital lender is trading at an unbelievable 1x its $200m projected revenue.
The new agreement with PEP includes recalibrated covenants settings that are “set to sustainable levels” for the larger organisation, after MONEYME quadrupled its loan book in FY22 through high organic growth and the acquisition of SocietyOne.
It also covers milestones relating to implementation of the previously announced strategic capital initiative, including a $25m (plus associated costs) early repayment of the senior secured facility with PEP, that was used to finance the acquisition of SocietyOne in March, to restore the facility back to its original size of $50m.
MME’s CEO and Managing Director, Clayton Howes said the finalised agreement was a positive step towards unlocking further growth for the company;
“The agreement with PEP is an important step in securing the Group’s funding to support future growth, and I would like to thank PEP for their ongoing partnership and commitment to supporting the business into the New Year.”
The company also said the partial repayment of the PEP facility is expected to support MME’s delivery of statutory profits by reducing its funding costs.
In its announcement, MME also confirmed that its revenue projection of >$200m and statutory profit target for FY23 was on track.
Clayton Howes said MME was “pleased with the progress made in executing our profitability strategy for FY23, which has been bolstered by proactive cost and margin management, the successful post acquisition migration of SocietyOne, moderated loan originations in the immediate term, and losses well within provisioning levels.”
“As I have said before, we do not think that the current share price reflects the value that has been created and look forward to seeing that change as MONEYME delivers on its strategy.”
At its AGM in November, MME announced it has engaged investment bank Morgan Stanley to assist with a competitive process to identify new capital solutions.
The company said the strategic capital initiative is designed to enable the group to take advantage of substantial growth opportunities in the Australian consumer and auto finance markets.
In today’s announcement, MME said the company was pleased with the breadth and depth of engagement so far and that it is targeting the announcement of a transaction by the start of Q4 FY23.
Clayton Howes said that the level of engagement attested to “the impressive challenger platform MONEYME has built over the last 10 years” and that the completion of the process would enable MME’s next growth phase after a milestone year for the company.
MME also announced it had appointed Rachel Gatehouse to its board of directors.
Gatehouse has more than 30 years of experience across the asset finance, motor finance, retail banking, structured lending and BNPL sectors.
Between 2019 and 2022 Rachel worked in venture capital backed firms including solar financing fintech Brighte, where she was CFO and COO overseeing finance, credit, operations, and debt funding.
From 2015 to 2018, Rachel was CFO and general manager, corporate services, then acting CEO of the Australian Institute of Company Directors. She has also held senior finance and CFO roles at ANZ Bank and HBOS Australia.
Commenting on the appointment, MONEYME’s Chairman, Peter Coad, said “We are delighted to welcome Rachel to the MONEYME Board. Rachel has significant financial services and governance experience which complements the Board’s existing capabilities. Rachel will chair our Audit & Risk Management Committee, where her governance and industry experience will be of great value.”
Speaking to Stockhead, Rachel Gatehouse said she was honoured to be joining the Board of “such a forward-thinking and innovative company.”
“MONEYME has leveraged cutting-edge technology to meet the financing needs of a new generation, with a laser focus on customer convenience. There’s much to be excited about for MONEYME’s next phase of growth.”
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.