The Prospa (ASX:PGL) share price is up 12% today. Here's why

Record revenue growth and originations have sent the Prospa share price soaring.

| More on:
Man looking excitedly at ASX share price gains on computer screen against backdrop of streamers

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 Prospa Group Ltd (ASX: PGL) share price is gaining today following the company's release of a positive trading update.

The financial technology company detailed its performance during the fourth quarter of the 2021 financial year.

At the time of writing, the Prospa share price is trading 12.21% higher at $1.195 after hitting a new 52-week high of $1.20 earlier today.

Let's take a closer look at today's news from Prospa.

The quarter that's been

In its release, Prospa reported record originations and revenue growth. The company's revenue for the quarter just been was $33.4 million – 17% higher than the previous quarter.

However, due to increased investments in its technology, products, sales, and marketing, Prospa's operating expenses were $20.9 million – up 17.4% on the previous quarter.

Over the quarter ended 30 June 2021, Prospa saw originations of $182.7 million. That's up 38.2% on the previous quarter's originations and 798% more than the prior corresponding quarter.

Nearly three quarters of its originations came from the company's small business loan and the rest was from its line of credit product.

In New Zealand, the company's originations increased by 72% quarter on quarter.

Additionally, 50% of Prospa's customers were returning customers.

Right now, Prospa has $458.6 million of available third-party debt facilities, of which, $97.2 million is undrawn. The company also has $80.4 million of cash.

Commentary from management

Prospa CEO Greg Moshal commented on the news, saying:

Prospa is now benefiting from the rapid recovery in the Australian, New Zealand and global economies. This quarter, Prospa surpassed many of our all-time record results…

Prospa's success and identity is built on the power of technology. It enables us to efficiently and rapidly service the financial needs of small-to-medium enterprises both within Australia and New Zealand, particularly as many are now reinvesting in the growth of their businesses.

We have further increased our investment in technology this quarter to support our strategy to provide a broader suite of cashflow management products meeting the needs of our customers.

Prospa share price snapshot

Today's gains have seen the Prospa share price lifting almost 38% higher than it was at the start of 2021.

It has also gained 33.3% since this time last year.

The company has a market capitalisation of around $175 million, with approximately 164 million shares outstanding.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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.

More on 52-Week Highs

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
52-Week Highs

13 ASX 200 shares at 52-week highs

These shares are making their shareholders smile on Thursday.

Read more »

Man raising both his arms in the air with a piggy bank on his lap, symbolising a record high.
52-Week Highs

These 5 ASX 200 shares just hit new 52-week highs

Do you own any of these five lucky stocks?

Read more »

ETF on white blocks with a rising arrow on top of coin piles.
52-Week Highs

12 ASX ETFs breaking the mould to hit 52-week highs today

What a day for ASX ETF investors!

Read more »

A happy boy with his dad dabs like a hero while his father checks his phone.
52-Week Highs

Why is the A2 Milk share price up 46% year to date and at a 52-week high?

This infant formula company's shares have delivered the goods this year.

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Travel Shares

Why is the Webjet share price racing to a 52-week high today?

Webjet has been busy talking up its WebBeds business this morning.

Read more »

Man pointing at a blue rising share price graph.
Financial Shares

Big ASX news: Macquarie share price hits new 52-week high

It's been a great day to own Macquarie shares...

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
52-Week Highs

Metcash share price hits 52-week high on broker upgrade: Time to buy?

Brokers have responded positively to its trading update.

Read more »

a woman sits amid a stylish home setting on a sofa with plush cushions with a coffee table and plant in the foreground while she peruses a tablet device.
52-Week Highs

52-week high! ASX All Ords stock surges 5% as chair steps down

Investors are shopping for Adairs shares after an announced leadership change.

Read more »