MoneyMe (ASX:MME) share price edges higher on positive trading update

The MoneyMe Ltd (ASX: MME) share price is edging higher in morning trade following a trading update for Q3 FY21. Here's the key highlights.

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The Moneyme Ltd (ASX: MME) share price is edging higher in mid-morning trade following a trading update for Q3 FY21.

At the time of writing, the digital credit company's share price is fetching for $1.45, up a marginal 0.3%.

How did MoneyMe perform?

MoneyMe shares are relatively flat despite delivering a robust performance for the quarter.

For the period ending 31 March 2021, MoneyMe reported originations of $108 million, reflecting a 57% increase on Q2 FY21. Over the prior corresponding period (pcp), this metric grew 111% ($51 million in Q3 FY20).

Gross customer receivables also surged to $233 million, a lift of 63% on the prior comparable period. Growth from the company's existing personal loan and freestyle products predominately drove the result.

MoneyMe noted that while the overall consumer credit market remained flat, its 'Generation Now' suite of offers attracted new cliental.

Following on to earnings, the company achieved a record of $15 million in revenue for Q3 FY21. In the prior quarter, revenue stood at $12 million, representing a 25% increase. MoneyMe revealed that it is expecting contracted revenue to come in at $19 million for Q4 FY21.

The average customer receivables term also jumped to 35 months, up from 32 months in the last quarter.

Funding costs reduced to 6% as compared to 9% in the first-half of FY21. The group noted the improvement came leveraging its bank warehouse facility. Furthermore, core operating cost margins pleasingly declined to 9% in Q3, down from 12% realised in H1 FY21.

Lastly, MoneyMe reaffirmed the quality of its credit book, attaining an average Equifax score to 644. This metric represents a credit scoring model, with any number between 580 to 669 considered as fair.

What did management say?

MoneyMe managing director and CEO, Clayton Howes hailed the strong result, saying:

We are incredibly pleased to report the growth and momentum the business is achieving, with increasing revenues and another set of records in originations and customer receivables.

Our business is accelerating with the credit quality of our customers increasing and it is fantastic to see the strong take-up of our recently launched products by our customers and merchants.

MoneyMe share price review

The MoneyMe share price has gained over 60% in the past 12 months, but is unchanged from year-to-date performance. The company's shares have travelled little since September 2020, last reaching a 52-week high of $2.00 the month before.

On valuation grounds, MoneyMe presides a market capitalisation of around $244.3 million, with 171.4 million shares on issue.

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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