Not going to name names following this statement, however, there was one company I owned, and I had clicked the “sell” button after watching the first CEO presentation after buying.

The Plenti team conversely is the opposite and continues to give me confidence in their ability to execute their plan.

Today they have released a statement upgrading their profit forecast. Expecting to be profitable for the full year to the end of the current quarter. The forecast more than doubles the previously stated objective of 1M to 2.2M NPAT.

The announcement also points to hitting the loan portfolio target of $1.25B

The company also recently announced a funding deal on decent terms to maintain interest costs which have aided in the improved forecast. At the time of that announcement, CEO Daniel Foggo was quoted saying “This transaction allows us to save around 1% on funding costs across $280 million loans, so it means a lot for us in terms of our bottom line,” and “It’s a positive development for our company in terms of lowering our funding costs and improving cash flow generation.”

Plenti has also formed an arrangement with two energy retailers, Energy Australia and AGL for interest-free loans for their solar and battery products.

The company continues to look to grow the loan pool with a 2025 target of $5B.

Ewan McGregor and Charley Boorman have featured in some epic ride adventures the most recent of which was Long Way Up from Ushuaia in Argentina through Latin America to Los Angeles. They did it on Harley Davidson then in pre-release, electric Livewire. They were also supported by pre-production Rivian. If you are into that kind of thing, it’s worth watching.

Why am I reading this I hear you ask? Well, Rivian just listed. Three years ago, the company lost a few hundred million, last year around a billion, and in the first 9 months of this year…another billion. The company has built/ sold a hundred something Rivian electric “adventure vehicles” and in the first few days following listing the shares are up over 70%.

On the other hand, Plenti released their results today which looked decent to me. All the numbers are still heading the right direction. Loan book continues to grow, defaults continue to decline, costs while they have increased are under control and in alignment with the business objectives. The target to NPAT remains on track.

The market thoughts. Better mark them down 4% 

Loan book in March ’21 was 1.26B and they have set a target of a 5B book by 2025. I think they can do it. Automotive is a decent chunk of the business – all they need is Rivian launch in Australia and see a preferred vehicle finance partner...

It is always pleasing to see the numbers heading the right direction and Plenti has put out another record quarter. This has also achieved the goal of $1B loan book target a quarter earlier than anticipated, by December this year. Plenti also expects to be cash flow positive by year end.

The growing load book was on the back of an all-time monthly of $95.5 million in loans in September, an increase of 159% on the same month in 2020. 

Loan growth has not surprisingly been in automotive, the highest book value, where everyone has been buying cars, as well as in personal loans and renewables.

Despite renewables being the smallest portion of loans, this sector is also seeing strong growth in the book.

Automotive funding costs have been lowered after Plenti completed a $306.3 million asset based securities transaction in August.

We are all, always, looking for investment returns. If not, what are we doing here? Point of this little anecdote is I have invested via Pleni since 2016, or RateSetter as they were originally called, as a peer to peer lender.

With all lending there are risks. In my peer to peer journey there have been precisely none, with all loans repaid in full, and even better average returns have been above 6%. This was at the conservative end of my portfolio and compared to something like real estate rental returns, that number is excellent.

As a peer to peer lender, they gave you the opportunity to participate in the IPO in September 2020. As I understood the business reasonably well, and the IPO opened the financials, I put a decent sum into it. It promptly plummeted.

This is a lesson about staying headfast and trusting your thesis. I should have added them to my Strawman portfolio where they would still be a hold for me.