Why the MoneyMe (ASX:MME) share price is climbing higher

The MoneyMe Ltd (ASX: MME) share price is climbing higher after releasing its second-quarter trading update for the 2021 financial year.

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The MoneyMe Ltd (ASX: MME) share price is climbing higher today. This comes after the company released its second-quarter trading update for the 2021 financial year.

During the first 30 minutes of trade, the MoneyMe share price catapulted to an intraday high of $1.475. However, some profit taking has led the digital credit company's shares to retrace back to $1.45, up 0.4%.

Record results

The MoneyMe share price is reversing the weakening ASX market trend today after reporting a positive set of numbers.

For the period ending December 31, MoneyMe delivered a record $69 million of originations. This amount reflects a 52% increase on the prior quarter and a record $27 million lift on the prior corresponding period. The company said that its closing gross loan book stood at $168.2 million at the end of the calendar year.

Driving the growth trajectory, MoneyMe is continuing attract new customers through its diversified portfolio mix. Just recently, the company launched the List Ready, Rent Ready, and MoneyMe+ products. These new products already accounts for 9% of total book value.

Other established originations include Personal Loans and Freestyle, which represent 54% and 37% of the entire portfolio, respectively. MoneyMe stated that expanding its current offering is the way forward to seize the addressable market opportunity.

Overall, the group achieved revenue of $11.7 million for the second-quarter. The company advised that significant cost of fund reductions is being met. This follows the refinancing of the Velocity warehouse facility announced in November, with the business now using the new Major Bank warehouse facility.

In addition, MoneyMe highlighted that it is focusing on improving its rolling net charge-off rates. It revealed that it has reduced this metric by 4% in the second-quarter, while attaining an average Equifax score to 638. The latter is a credit scoring model, with any number between 580 to 669 considered as fair.

Words from management

MoneyMe Managing Director and CEO, Mr. Clayton Howes, touched on the company's performance, saying:

We are incredibly pleased with MoneyMe's results for the quarter, and origination momentum for the different products is setting the business up for high and profitable balance sheet growth. The 52% increase in origination volume reflects exceptional profitable growth and it is exciting to see the new funding warehouse facility delivering a step change to funding costs and increased capacity for growth.

With our core and more recently launched products resonating so well with Generation Now, the innovation pipeline is continuing at pace as we continue to build for massive scale and product diversification opportunities.

About the MoneyMe share price

The MoneyMe share price is down about 4% when looking at a 12-month historical chart. Although the company's shares dipped to an all time low of 50 cents, MoneyMe shares began their accent in the months following.

From September onwards however, the MoneyMe share price has stabilised around the $1.45 to $1.50 mark.

On the current valuation grounds, the company has a market capitalisation of roughly $248 million.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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