The Plenti Group Ltd (ASX: PLT) share price has shot out of the gates this morning after the lender announced its half year FY21 results for the 6 months ended 30 September 2020.
Plenti listed on the ASX on 23 September 2020 at an offer price of $1.66, but prior to today its shares had sunk more than 30% from the offer price. However, the company’s results reveal it has exceeded its prospectus forecasts, and the Plenti share price is up 5.7% to $1.20 per share at the time of writing.
Plenti is a fast-growing technology-led consumer lending and investment business. It seeks to provide borrowers with efficient and competitive loans, delivered via simple digital experiences.
Plenti has funded approximately $870 million in loans to over 55,000 borrowers since its launch in 2014. Its target sectors include automotive, renewable energy and personal lending verticals.
What did Plenti report in its first half results?
Plenti delivered ahead of prospectus forecasts on all key financial metrics. The company reported revenue of $26.0 million, representing growth of 41% on the prior corresponding period and 2% ahead of prospectus forecast, driven by continued strong origination and loan portfolio growth.
It achieved record loan originations of $167.0 million for the half, 33% above the first half of FY20 and 7% ahead of its prospectus forecast. Loan origination growth resumed in the second quarter, with record monthly volumes achieved in July, August and September.
Growth was led by automotive lending, coinciding with the launch of Plenti’s warehouse-funded car loan offering in early 2020. Automotive loan originations were $81.1 million for the half, up 323% on the prior corresponding period. Its renewable energy loan originations were at $28.5 million for the half, up 47% on the prior corresponding period.
The average interest rate paid by customers decreased to 12.1% from 13.3%, reflective of the company’s shift towards automotive and renewable energy loans, which are lower-risk and longer term in nature compared to personal loans.
Funding rates continued to decrease, down to 6.3% from 7.1% in the prior corresponding period. This flows on into Plenti’s cost-to-income ratio, which reduced to 48.5% from 61.6% in the first half of FY20, reflecting the benefits of increased operating efficiency.
The results delivered a more favourable loss for the half, with pro forma net loss after tax of $3.4 million compared to the $7.9 million in the pcp.
Plenti reports that it has continued to experience strong trading momentum in the second half of its financial year, which ends 31 March 2021. Loan originations were $37.2 million in October, representing a fourth consecutive record month of originations.
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Motley Fool contributor Lina Lim 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.
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