Money3 share price bounces on positive results

The Money3 Corporation Limited (ASX: MNY) share price is trading higher today following the release of the lender's half-year results.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Money3 Corporation Limited (ASX: MNY) share price is trading higher today following the release of the lender's half-year results. Impressive results have driven Money3 shares up 5.17% to $2.85.

Revenue and profit up 

Money3 reported first-half normalised net profit after tax (NPAT) of $15.7 million, up 61.9%. The loan book has grown 48.8% since December 2018 to reach $426.7 million.

H1 FY20 revenue increased 55% over the prior corresponding period (pcp) to $62.7 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) came in 56.4% higher at $30.5 million.

Additionally, earnings per share (EPS) increased 31.3% over the pcp to 8.6 cents, and an interim dividend of 5 cents per share (fully franked) was declared. 

Money3's business 

Money3 operates in the consumer lending space providing personal loans up to $12,000 and car loans up to $50,000. Money3 acquired Go Car Finance in New Zealand in 2H19, expanding the company's geographic footprint.

The company reports that it has originated loans for over 500,000 customers with more than $1 billion lent since inception. In Australia, 1 in 500 vehicles have a current Money3 loan while in New Zealand, 1 in 800 vehicles have a current Go Car Finance loan. 

Between FY15 and FY19, revenue grew at a compound annual growth rate (CAGR) of 25%, while EBITDA grew at 30%. Over the same period, the gross loan book grew at a CAGR of 28% with EPS growing at 21%. 

Originations and bad debts 

In H1 FY20, bad debts increased to $9.7 million from $7 million in the pcp, while the impairment allowance increased to $2.8 million from $0.8 million.

Loan originations in the first half of FY20 were $138 million, with Money3 forecasting $137 million in originations in the second half. This would bring total originations for FY20 to $275 million, well up on the $193 million in loans originated in FY19.

Money3 market 

Money3 estimates the annual market for consumer vehicle financing in Australia is worth some $20 billion, with $6.3 billion attributed to used vehicle financing.

The company estimates it finances 3% of the used car market annually, with 4-5 million Australians either not serviced or excluded by traditional lenders. Go Car Finance estimates around 1 million New Zealanders are either not serviced or excluded by traditional lenders. 

Outlook

Money3 is forecasting NPAT for FY20 from continuing operations of more than $30 million and statutory NPAT in excess of $32 million.

The company has $50 million in funding headroom and forecasts the gross loan book will grow to more than $475 million this financial year.

In addition, a 10 cent dividend is predicted for this financial year.

Motley Fool contributor Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

More on Share Market News

Hands reaching high for a trophy with a sunset in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a cracking end to the trading week for ASX investors.

Read more »

Two brokers analysing stocks.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

Woman and man calculating a dividend yield.
Opinions

Buy or bail? Fundie's verdict on 2 ASX 300 shares

Stuart Bromley of Medallion Financial Group provides his insights.

Read more »

A man analyses stockmarket graph on his computer.
Share Market News

US stocks vs. ASX shares in FY25

Would you be surprised to learn that ASX tech shares rose faster than US tech stocks by almost 2:1?

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Share Gainers

Why ARB, Cleanaway, Hub24, and RPMGlobal shares are storming higher today

These shares are ending the week with a bang. But why?

Read more »

a man weraing a suit sits nervously at his laptop computer biting into his clenched hand with nerves, and perhaps fear.
Share Fallers

Why Evolution Mining, G8 Education, Lottery Corp, and Lynas shares are tumbling today

These shares are ending the week in the red. But why?

Read more »

A businessman lights up the fifth star in a lineup, indicating positive share price for a top performer
Broker Notes

Bell Potter names more of the best ASX 200 stocks to buy in July

These stocks could be best buys this month according to the broker.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Broker Notes

Macquarie tips 55% upside for this ASX mining stock

Let's see what the broker is saying about this stock.

Read more »