Harmoney (ASX:HMY) shares move up on ASX. Here’s why


  • Harmoney share price gained more than 8% in the wee hours of ASX trade today.
  • The Company has witnessed a record September quarter.
  • Australian new customer originations grow up 885% versus pcp.

Online direct personal lender Harmoney Corp Limited (ASX:HMY) has issued a performance update Q1-FY22, ended 30 September 2021. In reaction, HMY shares have picked up on ASX. HMY shares are trading up over 8%, taking the small-cap stock up from its monthly low.

How was Q1-FY22 for Harmoney?

  • For HMY, Q1-FY22 was the largest quarter of new originations in history. Its Australian new customer originations grew to AU$31 million, up 885% pcp and 17% on Q4 FY21.
  • HMY’s group Pro-forma loan book reached AU$517 million, at a net interest margin of over 11% and net lending margin of 7% and above.
  • The Australian receivables book grew to AU$155 million and was up 58% pcp and 15% on Q4 FY21. The New Zealand book was broadly neutral, temporarily impacted by strict COVID-19 lockdowns.
  • HMY saw a significant improvement in credit performance and key lead indicators, driving revenue growth in current and future financial years.
  • Harmoney’s unique consumer-direct lending model of 3Rs (Return, Repeat, Renew) has allowed it to support and enhance customers’ growing borrowing needs with minimal additional marketing cost.
  • It has thus achieved a breakeven on Pro-forma cash net profit after tax on existing loan book, gaining value from automation and scalability on its 100% consumer-direct model. 

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Has Harmoney Corp changed its FY22 guidance?

  • Harmoney provides unsecured personal loans to consumers priced on a risk-based approach. It has thus considered the impact of lockdowns in Australia and New Zealand for FY22 guidance since they materially impact customer repayments and loan originations.
  • HMY’s consistent new customer demand enables it to focus on lending and product enhancements.
  • HMY has therefore kept a group Pro-forma loan book of at least AU$600 million for FY22. It will be a growth of over 20% in FY21.
  • The group Pro-forma revenue is kept in the FY22 guidance at AU$92 million, at a 16%+ growth.
  • The net lending margin is kept at a minimum of 7%, reflecting a 0.2%+ growth on FY21 for HMY. 

Post update on ASX, HMY shares have moved up from their monthly low. Shares have gained 8.823%, making the share price AU$1.850 per share at 1:00 PM AEST    

Bottom line

Despite lockdowns in both operational geographies, HMY managed to improve critical metrics in the September quarter. The company’s direct consumer model seems to have worked in advantage for it. Thus, investor confidence has improved on HMY, taking share price up on ASX today.

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