16 quarters of positive growth and the last 12 quarters have averaged 26% per quarter.
At this rate Wisr can look forward the following milestones in the near future and all this does not included the additional growth from the planned strategic investment in Europe as recently announced and currently subject to due diligence.
June 2021 - First $100M quarter
Sept 2021 - First $50M month
Feb 2022 - First $1bn loan origination
Wisr Posts 19 Consecutive Quarters of Growth, 151% PCP Result comes on the back of $97.8m in new originations for Q3FY21
DISC: I hold
After a long period of sidewise price action all the overhead supply should be nearly exhausted and I think this deal, once finalised, will be the trigger to restart the uptrend in price.
Wisr makes strategic investment in European fintech platform Arbor
Entry pathway to circa $1.76 Trillion EU consumer finance market1
Sydney, 30 March 2021 - Wisr Limited (ASX: WZR) (ACN 004 661 205) (“Wisr”, or the “Company”) is pleased to announce today it has executed a term sheet to invest, via a convertible loan structure, in European financial wellness fintech platform, Arbor.
If converted, the investment will give Wisr a small minority shareholding in Arbor, with a pathway to potentially increase the shareholding to 45% over the next 36 months.
Any additional investment is at Wisr’s option, subject to future valuation thresholds and contingent on various milestones being achieved. The investment remains subject to finalisation of due diligence and legal documentation which is anticipated by the end of April 2021.
Highlights of deal:
? Strategic investment by Wisr opens up entry pathway to circa $1.76 Trillion (AUD) consumer finance market1 in EU
? Low-risk investment structure - modest upfront consideration with options to increase
shareholding to 45% at Wisr’s election as the model is proven out across the EU
? Arbor is an EU based fintech with a financial wellness platform, utilising a digital wallet to offer savings, investment and lending features to almost 100,000 customers, and is
growing its user base circa 20% month-on-month
? Arbor’s revenue streams include a customer subscription-based model for its platform, as well as lending revenue via a recently launched “ethical loan” product
? Wisr and Arbor will share IP across both organisations, with Wisr assisting in delivering an ethical lending experience to Arbor’s customers through Arbor’s proprietary financial
? Wisr’s upfront consideration is circa $400,000 cash, with any follow-on investment subject to milestones being achieved by Arbor, and can be settled through a combination of cash and shares at Wisr’s discretion
Founded in 2017 and backed by leading venture capital firms FinRebel Group (New York), Tifin Capital Partners (New York) and Apex Capital Partners (Sydney), Arbor has accumulated almost 100,000 customers in the EU market and is rapidly scaling with a 20% month-on-month growth rate and a robust retention track record. Similar to the Wisr Platform, Arbor has built a holistic personal finance platform with
a complimentary suite of products that help to improve customer’s financial wellness. Arbor’s current offerings include a digital wallet delivering savings, investment, debt repayment features and a recently launched “ethical loan” product.
Wisr makes strategic investment in European fintech platform Arbor
Entry pathway to circa $1.76 Trillion EU consumer finance market*1
Highlights of deal:
Also WZR Arbor Investor Zoom Call
Sydney, 30 March 2021 - Wisr Limited (ASX: WZR) (ACN 004 661 205) (“Wisr”, or the “Company”) is pleased to announce that following the announcement of its investment into European financial wellness fintech platform, Arbor, investors are invited to join a Zoom webcast from 10.00am (AEDT) to 10.30am on Wednesday 31 March.
The Zoom webcast call will be hosted by Wisr CEO, Anthony Nantes and Dr. Lili Sussman, Chief Strategy Officer (CSO).
Please use the following link and passcode below to join the webinar:
For those wanting to join by phone, please use the any of the following with the Webinar ID: 994 6551 2396
WZR Trading Update:
Expecting to have a great quarterly as the car loans should be starting to kick in. Suggestions are in excess of $100M loan approvals for the quarter.
One metric that WZR have discussed previously is how long it takes to originate $50M in loans.
As growth accelerates this time frame has got shorter and shorter. Personally, I think they are within striking distance of announcing their first $50M month.
Adcock Private Equity, the largest shareholder, has been selling down their holdings over the last 6 months. Since 6th Feb they have sold down approx 49.3M shares. They did participate in the cap raise and bought 3.5M shares but have sold a significant stake of their holding. They still have around 215M shares or about 19% of total shares on issue.
The CEO of Adcock is John Nantes, also the Executive Chairman of Wisr.
Buy on the pull back in the trend channel.
Moelis Investment Rating: HOLD and 12M Target Price: A$0.28.
The red flags that have convinced me to Sell Wisr.
Directors performance rights:
All of the performance rights for the directors are linked to share price targets. This is too easily manipluated for such an early stage company with positive announcments, broker recommendations and fund mananger recommendations.
When the directors' 5M rights @ 18c lapsed in Novemeber the board decided at the AGM to set the base for the next set of rights at 14c. By the time this was announced the conditions had already been met and they recevied around 5M rights straight anyway. All the current targets are still linked to share price targets, no targets for actual business performance.
At its height the SP was around 34c, during the pull back in March it went as low as 7c, it since bounced back to around 15c. Not 1 director has made an on-market purchase.
Loan Growth is slowing
Q2FY20 had QoQ growth of 36%, Q3FY20 had QoQ growth of 23% and the company has indicated this will be much lower in Q4 as they raise stress test criteria for new loans in response to the econmic pull back caused by Covid19. They have about $35 cash on hand after the recent capital raising but that may be burnt through pretty quickly for a company that isnt yet cashflow positive.
One of the highlights of the annoucment of the Loan Funding facility with NAB in Novemeber 2019 was the tripling of the margins they receive on the loans. They have used the initial 50M warehouse and instread of continuing with thext 150M they are now returnng to the off balance sheet funding model for which they receive only a loan maintence fee. This may have been NAB reducing their exposure to unsecured consumer lending or Wisr spreading the risk to additional funding channels either way this will a significant impact on predicted revenues going forward.
Wisr's loan book is the primary source for its revenues and for it to slow down so quickly it the biggest red flag.
Loan arrears are growing inline with its Loan book
90 days+ loan arrears are still about 1.66% this has stayed pretty constant. This indicates that bad debts are growing as fast as the loan book. As the economy goes into recession and unemployment rises this number is more likely to grow then reduce. Not a good combination with falling revenues.
Wisr may survive this recession and turn it around to be come profitable but for me there are better opportunites to invest at the moment. Will keep watching it.
Wisr provided a business update today
Company shareprice has taken a signficiant fall from ATH of 34c to 6.6 at time of announcment. Mainly due to the previous valuation being stretched, current ecconimic downturn and concerns about the business abiltiy to ride out a recession.
This announcement should aleviate that somewhat. The capital raise came at the perfect time be it by design or by luck. I suspect a lot of Wisr's competitors wont be so well funded and will really struggle over the next few months. This will provide an optunity for WIsr to increase market share.
I suspect loan growth with significatly pull back over the next few months as Australia deals with the Coronavirus and most lilkey goes into a recession.
No mention of the secured vehicle loans due to commence in Q3, I suspect because no one in Australia is buying cars at the moment.
Its reassuring to see the loans in arrears are still quite low, I suspect these will increase signifcantly over the next few months, something to keep an eye on.
Hard to see them reaching the predicted $240-$260M loan originations by FY20, but there is no point providing guidence at the moment.