Wisr has planted the seeds for growth in Q4 FY24 and beyond. Pic: Getty Images.
‘Path to profitability’: Wisr bolsters balance sheet in Q4, secures $50m debt facility
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- Wisr to pivot from deliberate moderated loan volume settings in Q3 FY24 to loan volume growth settings in Q4 FY24 and beyond
- Company secures $50m debt facility to provide additional strength to balance sheet and fund loan book growth
- Debt facility to accelerate Wisr’s path to profitability and see company through to ‘self-sustaining capital position’
Special Report: Wisr secures a $50m facility from global financial services firm Nomura, which will accelerate the non-bank lender’s path to profitability.
Wisr (ASX:WZR) has maintained deliberate moderated loan volume settings in Q3 FY24 but intends to pivot to loan volume growth settings in Q4 FY24 and beyond.
WZR says its margins are expanding with portfolio net interest margin (NIM) 5.24% in Q4 FY24, slightly up on pcp of 5.20%. The front book run rate NIM was 6.55%, up from 4.92% on pcp.
Quarterly revenue was $23.1m, a 4% decrease on pcp, while EBITDA of $300k, was an improvement on pcp, which recorded a loss of $800k.
The company’s quarterly net operating cash flow of $4.5m, was a 13% increase on pcp.
Credit quality maintained
WZR says loan originations of $52m were consistent with Q2 FY24 of $53m and driven by deliberate moderated loan volume settings.
The company’s loan book of $808m was a 5% decrease on the prior quarter, also driven by deliberate moderated loan volume settings. WZR intends to pivot to loan volume growth settings in Q4 FY24 and beyond.
WZR’s loan book average credit score remained strong and the same as the previous quarter at 781, with 90+ day arrears of 1.71% – largely impacted by lower loan book versus Q2 FY24 of 1.31%.
The company says the increase in late-stage balances has not materialised into losses.
Net losses of $4.6m was a 7% decrease on Q2 FY24.
The Wisr App has facilitated the payment of $8.3m in roundups on customer debt and $21m in extra loan repayments.
Wisr’s customer net promoter score remains strong at +78.
CEO Andrew Goodwin says it’s an exciting time for WZR as the company rolls off its last quarter of moderated loan volume settings.
“Notwithstanding a small decrease in loan book size, we delivered strong increases in front book yield and NIM to 13.16% (11.94% pcp) and 6.55% (4.92% pcp) respectively, while maintaining a high average credit score of 781,” he says.
Balance sheet strength with $50m debt facility to support growth
WZR had unrestricted cash of $21.6m on March 31, 2024, which was a 9% increase on December 31, 2023. The company attributed the increase in its cash balance to “prudent and efficient capital management.”
The lender says two warehouses are in place to support originations with a total commitment value of $650m and an undrawn capacity of $226m.
The WZR balance sheet has been further strengthened through a $50m institutionally backed three-year debt facility provided by global financial services group Nomura.
The enlarged facility, compared to WZR’s existing facility, will support its intention to pivot to loan volume growth.
The company intends to draw down $35m initially, with part of the proceeds repaying the existing $25m debt facility. A further $15m is available to fund WZR’s ongoing growth plans.
Neu Capital advised WZR on the transaction.
‘Path to profitability’
Goodwin says the $50M facility provided by Nomura is “a pivotal moment for the business”.
He says WZR is excited to partner with Nomura and looks forward to an ongoing mutually beneficial relationship with an institution of such quality.
“The additional balance sheet strength provided by the facility sees Wisr well placed to pivot to loan volume growth settings in Q4 FY24 and beyond, accelerating our path to profitability and seeing the company through to a self-sustaining capital position,” he says.
“The facility is a testament to the debt market’s confidence in Wisr, including the quality of our prime loan book, our technology and processes, and the strong risk and operational frameworks in place.”
Nomura Australia head of financial institutions Ignacio Usandizaga says the company is excited to support WZR.
“Nomura is excited to partner with Wisr and support the business through its next phase of growth,” Usandizaga says.
This article was developed in collaboration with Wisr, 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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