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MoneyMe shares surge again in the wake of booming Q4 growth numbers

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The fintech lender continues to smash expectations across all of its key revenue metrics.

Tech consumer finance platform MoneyMe (ASX:MME) has been building strong operating momentum through the first half of 2021.

And in a trading update this morning, it confirmed the results of that momentum with booming growth in new loan originations and revenue for the June quarter.

Investors responded positively to the update, sending MME shares around 10 per cent higher in morning trade and back near all-time highs above $2.

Record growth

Among the highlights in its trading update, MME said new loan originations rose to $161m in Q4, up 391% from the prior year period.

Total loan originations for the 2021 financial year more than doubled, to $384m.

In addition, MME flagged strong growth in loan originations for its new vehicle financing platform, which generated $12m in new lending in just its first 12 weeks of operations.

The top-line loan growth flowed through to revenues of $19m in the June quarter, and full-year revenues of $58m – a gain of 21% from the previous year.

Just as importantly, MME booked that quarterly revenue increase while also streamlining and reducing its cost base through the expansion of its wholesale funding program.

“Cost of funds reduced by 55%, from the beginning of FY21 to the last quarter, as the group continues to leverage its major bank warehouse facility,” MoneyMe said.

Scale-up

The net result is that MoneyMe is executing on a business model that leverages its tech advantage to drive new growth in loan originations, which flows through to higher revenues while also allowing it to reduce its cost of funding and boost margins.

An example of that operating leverage was clearly highlighted earlier this week, when MoneyMe announced a major $108m uplift to its existing warehouse facility.

CEO Clayton Howes said the top-line growth clearly illustrates how the 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,” he said, citing the early success of Autopay.

The company is also scaling up its loan book with strong credit metrics, with a reduction in net charge-offs to 5% in the 2021 financial year, down from 7% in FY20.

MME’s aggregate score with credit reporting agency Equifax also rose to 650, up from 644 in the year prior.

And as the economy emerges from the COVID-19 pandemic, MME continues to be “well placed through it’s diversified customer receivables and calibrated underwriting”, the company said.

This article was developed in collaboration with MoneyMe, 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.

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