Plenti delivers ‘exceptional’ quarter as loan growth surges, shares jump

The company saw particularly strong growth in its automotive finance book, which ripped higher by more than 300 per cent.

After a big year in 2020, consumer finance platform Plenti (ASX:PLT) confirmed this morning that its strong growth has continued into 2021.

Quarterly loan originations came in at $172.4m – a new record high, more than double the same time last year and a robust 32 per cent higher than the previous quarter in December.

The company also booked consistent growth across each of its three main verticals, as it establishes traction in the $30 billion market for automotive finance, as well as personal lending and renewable energy loans.

Shares in the company jumped by 10 per cent following the announcement, to $1.10.

Tech advantage

Speaking with Stockhead about the result, Plenti CEO Daniel Foggo said the fact that the company is consistently booking new record highs in loan originations each quarter is a testament to the strength of its market position.

And in a market where banks are moving towards funding-based roles while tech platforms build innovative ways to scale, he highlighted Plenti’s proprietary IP advantage.

“The fact that our technology is the driver of this growth reaffirms everything that sits at the foundation of our organisation: that a technology-led business can deliver to customers what they want and need, which is faster, fairer loans,” Foggo said.

Foggo added that Plenti’s broader long-term strategy is to become “Australia’s best lender”.

“With strong momentum across each part of our business, we are powering towards our one-billion-dollar loan book milestone.”

Breaking down the top-line results, Plenti has gained a first-mover advantage in tech-based automotive lending where quarterly loan growth rocketed higher by more than 300 per cent.

Loan originations in personal lending rose by 57 per cent from the December quarter, while loan growth in Plenti’s new vertical for renewable energy was up 10 per cent.

Plenti closed the March quarter with a loan book of $615m, up 21 per cent from December, while the weighted average Equifax credit score during the quarter was 831.

Looking ahead

With such strong quarterly momentum, Foggo said investors have plenty to look forward to heading into the June quarter, in the lead-up to Plenti’s full-year results for FY21.

For starters, the company has booked increased revenue growth from loan originations on top of an expanded funding base and have recently increased the size of its automotive loan warehouse facility to $350m (up from $275m).

In comments to Stockhead recently, Foggo explained that Plenti will look to expand its wholesale lending facilities in line with ongoing loan growth towards the second half of this year, creating a positive feedback loop between revenue growth and lower funding costs.

Near-term, Foggo said the company will look to capitalise on its first-mover advantage in automotive lending over the next three months.

“There’s a significant growth opportunity there and we are already well-placed to maximise our technology, operations and partner network to execute an entirely new product in this large and growing vertical.”

He also flagged more growth for Plenti’s newest vertical – a BNPL service for renewable energy – as it scales up distribution in the months ahead.

More broadly, Foggo said Plenti is focused on leveraging its in-house tech capability to provide a market-leading experience for consumers.

Delivering the best customer experience is “critical to maintaining our growth”, he said.

“It’s been a priority that we do not compromise on that customer proposition while continuing to grow so rapidly, and the scalable nature of our business has really enabled that,” Foggo said.

“As we grow, we’ll be assessing our credit decisioning models to ensure we’re giving customers the best opportunity to access the right finance for their circumstances.”

This article was developed in collaboration with Plenti, 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.