31 January 2023

ASX Announcement

2Q23 TRADING UPDATE

MONEYME delivers record revenue and statutory profit

MONEYME Limited (“MONEYME” or “Group”) is pleased to announce its second quarter results for

the period ending 31 December 2022.

2Q23 Trading Highlights

Strong returns

• Statutory Net Profit After Tax (NPAT) of >$8m for 1H23, up on pcp ($19m loss, 1H22;

$34m loss, 2H22)

• Record gross revenue of >$117m for 1H23, up >143% on pcp ($48m, 1H22; $95m, 2H22)

• Record gross revenue of >$60m for 2Q23, up >140% on pcp ($25m, 2Q22; $57m, 1Q23)

• Core operating expenses to the loan book2 <3% for 2Q23, down on pcp (11%, 2Q22;

5%,1Q23)

Continuing transition to lower credit risk assets

• Closing average Equifax score increased to 714 for 2Q23 (672, 2Q22; 711, 1Q23)

• Secured assets increased to 41% of loan book for 2Q23 (26%, 2Q22; 40%,1Q23)

• Net losses of 6.0% for 1H23 (5%, 2H22) in line with the expected lag effect related to the

historical composition of the loan book. The increased credit quality of the book and

operational measures undertaken are expected to reduce loss rates in the coming months.

The above considerations are reflected in the Group’s credit loss provision and customer

pricing as appropriate

Business positioning and outlook

Management expects:

• Positive statutory NPAT for FY23; Gross revenue >$220m

• Credit losses expected to reduce in line with changes to the asset credit risk profile

• Sustainable growth of the loan book

Clayton Howes, MONEYME’s Managing Director and CEO said:

“We are pleased to announce statutory profits and record revenue in the first half, beating analyst

expectations. Building from strong results in the first quarter, the momentum continued into the

second quarter and has seen us upgrading our outlook on revenue and profit for the full year.

Our return to statutory profitability after a prolonged period of high growth is not only a result of a

shift in near-term business strategy in response to the macro environment, it is also a continuation

of our commitment to drive profitable growth and a testament to the quality and proficiency of our

team.

We are proud of the agility and adaptability that MONEYME has demonstrated in navigating rising

interest rates and we are ready to take advantage of the market opportunity in car financing and

the potential tailwinds from changing BNPL regulation. With SocietyOne successfully integrated

into the business, we are looking forward to solidifying our position as a leading non-bank

challenger.

It is also pleasing to note the business is progressing this agenda alongside the delivery of strong

ESG outcomes that I expect to be reflected in B-Corp certification in due course.”

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A statutory profit surprised the market positively (expected in this kind of market and credit environment), though it has obviously come at the cost of winding back the growth in the loan book. Credit quality seems to be improving overall - atleast the business has demonstrated the ability to be profitable.

Whatever brownie points management scored with investors (myself included) in scaling up the business and communicating well with shareholders has been more than undone by their terrible recent decisions, chiefly the ill-designed, highly dilutive capital raising conducted at 50c with the market price languishing well beneath immediately after the announcement. The slide has continued unabated since.

It's going to be a hard slog to win back the market's trust now, in a macro environment that seems to be turning hostile to sub-scale lenders like this.

@jimmybuffalino I have owned MME in the past and follow the company closely. Management have always seemed impressive and own a large quantity of stock. For whatever reason and likely being recent AFR articles I have sensed a fair bit of desperation in this recent funding increase. I just wonder if there is a deeper issue yet to be found out that may be at play. I do admit I have only heard positive things about autopay and even MME on a larger scale but the growth in autopay has been extreme. Same goes for Plenti where there auto loan book has grown excessively ober the past 12 months

I compare both MME and PLT to MNY (I own) which has also had great growth but in a much more controlled manner and wonder is this growth at all costs going to blow up in their (MME/PLT) face? do they have any hedging in place to reduce risk? especially in a growing interest rate environment.

MNY has been through the GFC so I think they will come out the other side perfectly fine, they continue to grow their loan book nicely and pay a dividend which has grown YoY. In hindsight I wish I took additional profits along the way but I am confident in management and there outlook as they have years of experience and knowledge in both good and bad economic cycles. Can the same be said for MME? happy to keep watching and hope they execute for shareholders.

Is MoneyMe now undervalued? The team at Intelligent Investor certainly think so. In their latest Stock Take podcast they discuss the business and the latest set of results. Was surprised to hear about the customer love for a money lender, don’t see that everyday! They have it as a spec buy under $2.20 and a hold up to $4. Their discussion on the stock begins at 43:17. One I had in my Strawman portfolio a while ago, thinking of re-adding.

I view it as a crude local proxy for UPST in the US (which I have benefited enormously from).

Torrid growth + well incentivised and aligned management + benign lending environment = room to run.

Generally not a fan of investing in 2nd/3rd tier lenders though, and my track record in this area of the market is poor.

Gaurav Sodhi from Intelligent Investor  (previous YMYC regular) is very enthusiastic about MME on Ausbiz "I personally would buy it over any other fintech in Australia." Starts around 25:30  https://www.ausbiz.com.au/media/the-call-tuesday-7-september?videoId=14438

I own btw.

Huge update from MME today. Nice timing as well after a quick pullback and during the middle of the day when people are sleeping. I have been topping up.


Highlights (Q4 and FY21)

• Q4 Originations of $161m up 391% on PCP

• Autopay originations of $12m in 12 weeks since launch and accelerating

• Q4 Revenue of $19m up 73% on PCP

• Cost of Funds reduced by 55% from 11% in Q1FY21 to 5% in Q4FY21

• Core Operating Costs margin2 reduced by 17% from 12% in FY20 to 10% in FY21

  Clayton Howes, MoneyMe’s Managing Director and CEO said:

  “We are extremely pleased to report incredible growth and momentum in MoneyMe. The record revenue, originations and customer receivables demonstrate our business is accelerating. At the same time credit quality is increasing and we’re seeing strong take-up from customers across diversified products and distribution channels. This quarter’s results include significant momentum in our first secured product, Autopay, the breakthrough innovation in car lending with dealerships signing up to the new platform and a faster than expected take-up from car purchasers.”

• Record Originations & Gross Customer Receivables
o Originationsof$161mforQ4FY21,up391%onpcp($33m,Q4FY20),andup49%

on prior quarter ($108m, Q3FY21)
o Originationsof$384mforFY21,up115%onpcp($179m,FY20)
o Autopayoriginationsof$12min12weekssincelaunch($6.2m,Q4FY21)
o Grosscustomerreceivablesof$333m,up149%onpcp($134m,Q4FY20),andup

43% on prior quarter ($233m, Q3FY21)

MME (Money Me) Update out this morning. Business still crushing it! Market still asleep at the wheel.

MoneyMe outperforms originations run rate with $108m originations, revenue of $15m

• Record Originations & Gross Customer Receivables.
  o Originationsof$108m,up111%onpcp($51m,Q3FY20).
  o Grosscustomerreceivablesof$233m,up63%onpcp($143m,Q3FY20).

• Record Revenue & Increasing Returns.

o Revenue of $15m, up 22% on prior quarter ($12m, Q2 FY21).

2 o Revenue contracted for Q4 FY21 increased to $19m .

o Average customer receivables term increased to 35 months (32 months, Q2 FY21). • Increasing operating leverage and cost efficiencies.

o Fundingcostsreducedto6%(9%,1HFY21)astheGroupcontinuestoleverage its bank warehouse facility.

o Core operating costs margin3 continues to reduce further to 9% (12%, 1H FY21). • Strong Credit & Book Quality.

o Average Equifax score of the book increased to 644 (638, Q2 FY21).
o COVID-19 deferrals reduced even further to 0.1% of gross customer receivables

(0.4%, Q2 FY21) and net charge-offs stable at 4% (4%, Q2 FY21).

$MME the cheeky devils! Had a takeover offer ~6months ago that no one knew about.

It was at a significant premium to where the Share price is Currently. The buisness has been killing it since then and SP is about the same. A Big rerate is coming at some point IMO and if not the circling sharks will try again.

I topped up yesterday morning and its now the 2nd larges position in my PA.

MoneyMe Limited (ASX: MME) (“MoneyMe” or “Group”) today announced an increase in

Australian Major Bank funding commitment from $100m to $150m.

MoneyMe’s significant growth trajectory, accelerating loan originations and its high yielding loan book is backed by the Group’s major funder with an increased senior warehouse commitment from $100m to $150m. The additional 50% increases the Group’s total warehouse structures to nearly $300m. This increase is on the same terms as the initial $100m commitment.

A sign of higher demand for loans and with their borrow costs having reduced they should also be attracting a higher quality credit customer as well.

The market is refusing to aknowledge this company atm.. Liquidity remains low as eyeballs in this crazy market are elsewhere on all the hyped stuff. But I expect a significant rerate for MME at some point.

H1 Report due tomorrow most of which is known by the market, but perhaps they will give some future guidance.