Money3 records another strong set of results.

Highlights:

• 22.1% loan book growth to 733.4 mil
• revenue increase 29.5% to 187.9 mil
• EBITDA 22.4% increase to 99mil
• NPAT to $51.6mil, 31.6% increase
• Earnings per share to 24.4cents up 22.9%
• 30% increase in full-year dividends to 13cents
• over 300mil in available funding to support growth or acquisitions

MNY got sold off recently and it was incredibly cheap some weeks ago. I took full advantage to add more shares IRL. MNY currently has a share buyback coming on which will support the price as a certain level. MNY also has survived the GFC so this is not one of these new age fintech's growing at all costs, they are a steady earner, paying dividends and growing at a solid rate YonY.

outlook:

• consumers demand for the groups products continue to increase, and record results are expected in FY23. Forecasts on >$1 Billion loan book expected and they will announce guidance in November at AGM.

I somewhat see MNY as a bit like a TechnologyOne. Not as good a business but EPS continually grow each year, pay a nice dividend that increases YonY. Like TNE it will never shoot the lights out but SP growth occurs steadily.

DISC - I own IRL and SM

Money3 release another strong set of results

1H highlights

• 34.5% increase in revenue to 91.3 mil
• 29.6% increase in NPAT to $25.8 mil (well on track to meet guidance of 50m, I now expect this to be exceeded especially with NZ and Aust opening up).
• 56.3% increase in new loan originations to $236.2 mil
• 45.7% increase in gross loan book to $690.8 mil (FY22 forecast loan book of $800m on track)
• 6c fully franked dividend paid

MNY report that they are seeing growth in both scale and quality of loans with 60% of all borrowers rated as "strong" (likely to pay back debt), and bad debts continue to trend down to only 3.9% of the loan book and continue to trend this way.

CEO who I highly rate says they have seen strong demand since Christmas and firmly believes they will meet guidance which as mentioned above I would imagine will be exceeded. As I expected the supply chain issues are working favourably for MNY as this is pushing up car prices therefore people taking out larger loans. Having said this because people are cashed up they are also seeing loans being paid off hence "bad debt" trending downward.

This one is a nice set and forget stock. It compounds nicely over time and pays a dividend. MNY will not ever shoot the lights out though.

Disc - I hold IRL and SM

Money3 has today announced a 20% increase to the Credit Suisse Warehouse debt facility to $300mil,along with a significant reduction in the cost of funds.

The reduction in the cost of funds should see ~$4.5 mil saving per annum when the facility is fully deployed.

This additional funding allows MNY to now grow the gross loan book to $950mil with the target of $1bil the goal.

CEO further added that they are experiencing record demand from consumers in the lead up to Christmas.

DISC- Held IRL and SM

Money3 secured additional funding through MA financial group.

CEO stated that post easing of lockdowns and the lead up to Christmas that the group has experienced strong lending momentum, lending to a record $50 mil in November.

The group gross loan book has grown now to ~$680 mil with the FY22 forecast Gross loan book expected to be $800mil. With these results it appears that MNY are on their way to exceeding this target and I would expect a profit upgrade sometime later in the Financial year. Management have a record of exceeding guidance.

MNY have a goal of reaching a $1bn loan book.

Great company for compounding interest growing nicely YonY and paying a dividend.

Disc- I hold IRL and SM (recently topped up at $3 IRL)

Money3 provided a profit guidance today and a trading update for Q1.

Was a great result providing a profit guidance for FY22 of $50mil NPAT an increase of 27.7% on FY21

Q1 FY22 financial highlights

• revenue increase of 34.9% to $45.5 mil PCP
• new loan origination increase of 57.8% to $106.5 mil over PCP
• 6.1% increase in gross loan book to $637.5mil
• approx $140mil available funding headroom.
• 
  

Shows that management continue to navigate through the pandemic and lockdown issues in Aust and NZ well.

The goal is to achieve $800mil loan book by close FY22 and they are on the way to achieving this with current growth and funding headroom available.

DISC- Hold IRL and SM

Money3 provided another strong year.

FY21 Results

• EBITDA 80.9mil up 64.8%
• Loan Book 601mil up 38.5%
• NPAT 39.2mil up 76.6%
• Revenue 145.1mil up 17%
• EPS 19.85cents up 64.3%
• ROE 9.9% up 13.4%
• Dividend 7 cents - full year 10 cents

FY22 Targets

• Target 760-810 mil Loan Book with the aim of over 800 or top end guidance
• ROE continues to improve toward target of 15% (this is not necessarily a FY22 target rather just a target to trend it to 15%)

Money 3 has three business units within it.

1. Go Car Finance:
   • Loan book growth of over 30% since acquisition
   • strong new customer and loan growth, up over 90% in FY21 on PCP
   • 50% increase in revenue in FY21 over PCP
   • Expecting strong growth in FY22 
2. AFS??????
   • doubled warehouse facility so should see strong growth
   • saw significant growth in this sector
3. Money 3
   • Strong 2H FY21 up 40% on PCP
   • strong organic growth this year
   • possible acquisition in this area
   • avg loan size increased by 18% to 13k over PCP
   • 40% increase in 2H cash advanced over PCP

A strong year/ Industry Outlook:

• 4 banks funding Money3 group (reduced risk/reliance on one bank)
• Improving vehicle supply
• Large bank contraction favouring non-bank lenders
• Growing demand to buy an asset due to restricted travel

Company Outlook:

·         Continue to take market share

·         Accelerate expansion in digital online consumer channel

·         Leverage technology to improve customer experience

·         Launch commercial lending program

·         Pursue acquisitions.

The reason I like MNY compared to other pay day lenders is they secure the loan to an asset in this case a vehicle. MNY management are superb and have had good numbers now since they took over. They aim to have ROE lift to 15% (currently 9.9%) as they continue to grow the loan book towards 1 billion. The aim is to have 1 billion gross loan receivables by FY24. Once this occurs I would expect the ROE to increase significantly and towards and even past 20% (18-36 months). The business has had tailwinds since the Royal Commission of banks with volume of customers increasing for non-bank lenders. MNY provide a better service in comparison to the banks where loans are settled faster and at more convenience to their customers. They are also developing a mobile app which will further improve this. Further there is growing demand to buy an asset due to travel restrictions currently. The aim of 760-810 mil loan book looks very conservative and management said we will be looking at the top end of that. There is a competitive environment in this field with some exciting fintechs entering, namely MoneyMe (MME) the one that stands out to me the most with their AutoPay product showing strong growth however MNY to me is the leader in the segment. They have a strong balance sheet with improving credit quality and strong relationships with dealers.