A Lens Over Money3 Corporation’s Business And Financial Performance For 1H FY19  

A Lens Over Money3 Corporation’s Business And Financial Performance For 1H FY19  

Money3 Corporation Limited (ASX: MNY) today released an emerging leaders’ conference presentation, highlighting 9.3% improvement in group’s revenue to $66.0 million for 1HFY19 compared to the previous corresponding period.

Money3 is a Secured Automotive Loans specialist and non-bank credit provider of pre-owned automotive finance to millions of Australasian’s excluded by banks and other non-bank lenders. Since inception, the company has serviced 500,000 Australasian customers with over $1 billion in loans.

The company focuses on offering responsible lending to improve the quality of its growing Secured Automotive Loan Book as well as providing the opportunity and support to its customers to own their own vehicle.

On the numbers front, the company has reported outstanding growth in the first half of Fiscal 2019, including:

  • 3% growth in Gross Loan Book to $351.9 million
  • 2% increase in Broker Division Revenue to $40.4 million
  • 2% increase in Group EBITDA to $31.1 million
  • 3% increase in Group NPAT to $17.5 million
  • Bad debts within the target range of 5-6% of the gross loan book

Source: Company’s Emerging Leaders Conference Presentation

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Source: Company’s Emerging Leaders Conference Presentation

On the back of healthy cash position and continued business growth, the company declared a fully franked interim dividend of 5 cents per share for 1H FY19. The shareholders present as on the record date of 6 March 2019 would be entitled to receive this dividend on the payment date of 23 May 2019. Further, Money3 intends to pay a fully franked 10 cps dividend for the full fiscal year 2019 and 2020.

Acquisition of Go Car Finance:

Money3’s acquisition of Go Car Finance in New Zealand has added A$52.1  million to MNY Secured Automotive Loan Book while bringing in over 12 years of strong brand recognition and long established dealer relationships. The acquisition opens up new geography for MNY with strong prospects for growth.

Take a snapshot of Money3 Secured Automotive Loan Book position post-acquisition of Go Car Finance:

Source: Company’s Emerging Leaders Conference Presentation

 

Money3 Exit from SACC Lending:

Money3 has entered into an agreement to sell the assets of the Branch and Online distribution channels that support SACC (payday) lending. The sale is expected to yield in excess of ~$46 million, $35 million up front and the remainder over 6 months.

The completion of the transaction would result in a complete exit of SACC lending by Money3 and allow its business to focus on the growth of its Secured Automotive Loan Book in both Australia and New Zealand. The company stated that SACC sale would release ~$46 million to be redeployed into Secured Automotive Loan Book

Strategy and Outlook:

Money3 maintains a headroom of over $100 million available funds comprising of $50 million undrawn finance facility, ~$46 million expected from the sale of SACC and existing cash balance.

Source: Company’s Emerging Leaders Conference Presentation

Looking forward, the company eyes regulatory headwinds and greater levels of conservatism in mainstream lending for personal and automotive loans. However, Money3 confirmed the robust processes in place that are compliant with current regulations around flex commissions, add on insurance products and interest rate caps.

Stock Performance:

MNY stock price declined in early trade, before settling flat at $2.040 on 16 May 2019.

Over the past 12 months, the stock has gone up by 9.09% including an attractive upside of 20.00% in the last six months.


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