The WISR Ltd (ASX: WZR) share price is going gangbusters this morning, up 19.70% at the time of writing following a business update detailing its strategy to deal with the unfolding coronavirus outbreak in Australia.
Strong capital position
The company commented that it remains well capitalised and has the ability to use a number of tools at its disposal if it is required to reduce discretionary expenditure in the months ahead. It has completed the second tranche of its capital raising for January 2020 of $36.5 million, which is in addition to the $10.2 million of cash that it had on its books at the end of December 2019.
Wisr has extended its loan warehouse facility to $80 million, which is a $30 million increase since it went live on 30 November, and it has the option of expanding this to $200 million if required. The warehouse funding facility is backed by National Australia Bank Ltd. (ASX: NAB).
Wisr revealed that over $31.6 million in loans were written in the period from Q3FY20 to 13 March 2020, and it is on track to achieve quarter-on-quarter growth of between 15% and 25%. Wisr further added that its total loan originations currently sit at just over $195 million and are set to reach the $200 million in the coming weeks.
Coronavirus strategy
Wisr advised that it has still yet to see any real significant impact on its business due to the coronavirus outbreak. As a test run as to what may lie ahead, the company recently implemented a work from home day for the entire company and that went well with no major disruption to overall operations.
The company is now reviewing its credit policies in light of the significant developments here in Australia as the coronavirus outbreak escalates. These include looking at potential areas of risk in specific industries, as well as looking at strategies to deal with customers that fall into tough times in repaying loans, if the general economic environment in Australia deteriorates further.
The company has completed a number of stress test scenarios that it could potentially face in the months ahead and believes that it is relatively well equipped to deal with potential issues.
Commenting on the changing conditions, Wisr CEO Anthony Nantes said:
Whilst the Australian economic outlook has changed, Wisr is very strongly capitalised, with a business model able to rapidly adjust to changes in economic outlook. We are writing prime quality credit, which historically performs well through a credit cycle. We have a strong and committed team and the Company is well structured to withstand and succeed through any potential economic softening.
Recap of recent financial results
Wisr recently reported its half year FY 2020 financial results, where it reported that revenues from ordinary activities increased 83% to $2.2 million, driven primarily by strong growth in loan origination value. Expenses increased significantly to $15.17 million during the half, up from $4.67 million in 1H19, due to increased staffing at marketing costs.
