The Moneyme Ltd (ASX: MME) share price was a standout performer on Wednesday.
The digital consumer credit company’s shares were up as much as 21% at one stage before ending the day 11% higher at $1.60.
Why did the Moneyme share price zoom higher?
Investors were buying Moneyme shares following the release of its full year results for FY 2020.
For the 12 months ended 30 June 2020, Moneyme delivered a 49.5% increase in revenue to $47.7 million. This was ahead of its prospectus forecast of $45.8 million.
Key drivers of this growth were strong increases in loan originations and its gross loan book.
Moneyme reported a 52.8% increase in loan originations to $178.5 million and a 52.7% lift in its gross loan book to $133.6 million. The former was ahead of its prospectus forecast of $168.2 million, but the latter fell short of its prospectus forecast of $141.9 million. Management blamed the miss on an increase in customers making early repayments.
Nevertheless, this didn’t stop the company’s earnings outperforming expectations.
Pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $3.2 million and statutory EBITDA was $1.1 million. These were ahead of forecast by 10.5% and 20.8%, respectively.
Finally, statutory net profit after tax more than quadrupled to $1.3 million from $0.3 million in FY 2019.
A significant year.
MoneyMe’s Managing Director and Chief Executive Officer, Clayton Howes, was very pleased with the company’s performance.
He said: “The financial year ended 30 June 2020 was a significant year in the history of MoneyMe. We successfully completed our initial public offering, enabled Freestyle with a virtual Mastercard, launched ListReady and RentReady, entered new verticals, achieved accelerated growth, and exceeded our Prospectus forecasts while also outperforming credit risk expectations.”
“Throughout the year, our team contributed to delivering an outstanding set of results while meeting the operational challenges created by COVID-19 and successfully transitioning to operating as an ASX-listed company,” he added.
Outlook.
Mr Howes appears positive on the company’s prospects in FY 2021 and beyond.
He commented: “The MoneyMe brand has gone from strength to strength. I am truly excited about the future for this business that is well positioned to build upon its record achievements from FY20 throughout and beyond the current COVID-19 environment, and be the favourite credit partner for Generation Now.”
While no guidance was given for FY 2021, management expects to “continue to deliver growth and profit, expand our customer base, leverage our new products and launch more innovation across new verticals.”
One of those new products is its recently launched MoneyMe+ product. It joins the likes of Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) in the buy now pay later space, but with a focus on larger purchases.
Management intends to provide regular performance updates through the year.
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More reading
- MoneyMe share price surges, but is it sustainable?
- ASX stock of the day: Moneyme share price surges 36% as lender enters buy now, pay later space
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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