Why the MoneyMe (ASX:MME) share price is tumbling lower today

The MoneyMe Ltd (ASX: MME) share price is tumbling lower today despite the release of its Q1 update this morning…

| More on:
digital apply now button against backdrop of laptop keyboard

Image source: Getty Images

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 MoneyMe Ltd (ASX: MME) share price has been caught up in the market selloff and is tumbling lower despite the release of positive first quarter update.

At the time of writing, the digital credit company's shares are down 3% to $1.31.

How did MoneyMe perform in the first quarter?

For the three months ended 30 September, MoneyMe recorded revenue of $12 million. This was an 18% increase on the prior corresponding period.

Loan originations came in at $45.3 million. This was 39% ahead of the fourth quarter and up 10.5% on the same period last year.

Management notes that new business origination momentum is building, with September originations up 30% compared to August.

At the end of the period, the company's gross loan book was $138.1 million, up 33% from $104.1 million at the end of the prior corresponding period.

Pleasingly, MoneyMe's strong origination and gross loan book growth continued to be achieved while maintaining tightened underwriting to reflect the COVID-19 environment. Furthermore, the credit profile of its customer base is continuing to improve, with an increase in the average Equifax score to 637 for the quarter. This compares to 622 a year earlier.

The company's loan provisioning to gross loan book remains stable at 9.6%. Management notes that this provisioning continues to reflect additional overlays for macroeconomic uncertainties. Furthermore, the loan book continues to perform well, with strong underlying diversification and positive repayment profiles from customers.

Outlook.

Looking ahead, management expects its loan book to grow significantly during the financial year. This will be supported by more competitive pricing, wider product offers, and an improving trading environment.

MoneyMe's Managing Director and Chief Executive Officer, Clayton Howes, commented: "I am delighted with MoneyMe's robust profitable growth for the trading quarter ended 30 September 2020 that continues to reflect the calibration of our lending to the COVID-19 environment."

"The 30% increase in originations in September compared to August are a clear reflection of momentum building in new business originations. It is exciting to see the new funding warehouse facility delivering significantly lower funding costs and new business origination capacity and our core and more recently launched products resonating so well with Generation Now."

"The innovation pipeline is continuing at pace as we continue to invest for massive scale and product diversification opportunities in Australia and overseas. A fantastic first quarter that sets the business up well for further high and profitable balance sheet growth," he concluded.

Motley Fool contributor James Mickleboro 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 Fallers

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Avita Medical, Cettire, Domino's Pizza, and Star shares are falling today

These ASX shares are having a tough end to the week. But why?

Read more »

Three guys in shirts and ties give the thumbs down.
Share Fallers

Why Avita Medical, Netwealth, Peninsula Energy, and Zip shares are sinking today

These ASX shares are having a tough session. But why?

Read more »

Scientist looking at a laptop thinking about the share price performance.
Share Fallers

Why did this ASX All Ords stock just crash 16%?

Investors are punishing this ASX All Ords stock on Thursday. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Cardno, Mesoblast, Perseus, and Somnomed shares are dropping today

These ASX shares are having a tough hump day. But why?

Read more »

sad looking petroleum worker standing next to oil drill
Energy Shares

Why is the Santos share price tanking on Tuesday?

Santos shares are missing out on today's market gains.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why Brickworks, Flight Centre, Heartland, and Spartan Resources are falling today

These ASX shares are under pressure on Tuesday. But why?

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Share Fallers

Why APM, Azure Minerals, Beach Energy, and Elders shares are crashing today

These ASX shares are starting the week very poorly. But why?

Read more »

Oil worker using a smartphone in front of an oil rig.
Share Fallers

Guess which ASX 200 energy share is imploding 18% today on cost blowouts

ASX 200 investors are rushing to hit the sell button on this popular energy stock on Monday.

Read more »