What will acquisition of Australia’s loan book bring to Money3?

Summary

  • Money3 Corporation Ltd (ASX:MNY) on Monday said that it had entered into an acquisition agreement with GMF Australia Pty Ltd (GMFA), which was expected to close in February 2021.
  • The acquisition is expected to increase the automotive loan book of the Group by nearly A$23 million. 
  • GMFA would be acquired for almost A$17 million, and the cash reserves of the Group would fund the acquisition.

Money3 Corporation Ltd (ASX:MNY) on Monday said that it had entered into an acquisition agreement with GMF Australia Pty Ltd (GMFA), which was expected to close in February 2021. GMFA is a subsidiary of General Motors Financial Company Inc, which consists of a portfolio of nearly 700 automotive loans for new vehicles. 

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The acquisition is expected to increase the automotive loan book of the Group by nearly A$23 million. The prime credit quality customer database will facilitate growth of the Group's Automotive Financial Services Pty Ltd (AFS) business, Money3 Corporation also said in its trading update. The GMFA acquisition is expected to incur a minimal increase in the ongoing operational expenses of the Group. GMFA would be acquired for nearly A$17 million, and the acquisition would be funded from the cash reserves of the Group. 

The Group currently has over A$350 million of undrawn funding capacity and available cash to fund further loan book expansion through organic growth and loan portfolio acquisitions. Commenting on the development, Money3 Managing Director Scott Baldwin said that the Group continued to leverage its strengths in collections by acquiring nearly 700 customers of prime credit quality who had purchased a new vehicle through a Holden dealership. The acquisition demonstrates the Group’s ability to acquire customers either organically, or through portfolio acquisitions, Baldwin also said.

Image Source: Shutterstock

READ MORE: Why Money3 Corporation (ASX:MNY) acquired AFS ?

Revised guidance FY21 

The company said that recent acquisitions and strong trading conditions in the first half of FY21 were expected to positively impact full-year results. Money3 upgraded its full-year guidance for net profit after tax (NPAT) to A$36 million from A$34 million. 

Stock performance

Shares of Money3 closed at A$2.73, up 0.020 points, or 0.74 per cent on Friday, 15 January 2021, against the previous closing on Thursday, 14 January 2021. The stock is down 4.76 per cent in January.


READ MORE: Financial lessons that can help investors avert risk in 2021

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