This ASX financial company just became profitable, and its share price is surging 20%

We take a look at Harmoney's FY22 highlights.

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Key points

  • Harmoney provides online loans to customers in Australia and New Zealand 
  • Unaudited financial results show the company delivered profit in FY22 
  • Australian loan book numbers surged 113% on the previous corresponding period 

One ASX financial company is soaring ahead today following the release of its initial FY22 results.

The Harmoney Corp Ltd (ASX: HMY) share price is currently surging 20.29% higher, trading at 83 cents a share. In comparison, the S&P/ASX 200 Index (ASX: XJO) is down 0.58% at the time of writing.

Let's take a look at what the company reported today.

What did this ASX financial company report?

Highlights of Harmoney's FY22 preliminary unaudited results include:

  • Delivered proforma cash net profit after tax (NPAT) profitability in FY22
  • Total group proforma loan book jumped 37% on previous corresponding period (pcp) to $685 million
  • Australian loan book soared 113% to $287 million pcp
  • New Zealand loan book jumped 3%

What else did Harmoney reveal?

Harmoney is an online personal lender targeting the Australian and New Zealand markets.

A huge growth in customers appears to be underpinning the company's projected profit growth.

The company says its platform is gaining more than 12,000 new customer accounts per month. Of these, 8,000 are providing bank statement information.

It said it passed on a weighted average interest rise of greater than 100 basis points on new lending, in response to rising interest rates.

Commenting on the results, Harmoney CEO and managing director David Stevens said:

Harmoney continues to deliver on its high margin, consumer-direct growth strategy, with its Australian loan book growing by 113%, whilst achieving an enviable net interest margin of 12%, Net lending margin (after losses) of 8.4% and delivering proforma cash NPAT profitability.

Our credit performance has remained strong with losses and arrears at historic lows.

What is ahead?

Looking ahead, Harmoney is expecting Australian loan book numbers to be higher than New Zealand by the first half of FY23.

The company is expecting higher account acquisition, new loans, and net lending margin increases to drive cash NPAT growth in FY23.

Commenting on potential central bank rate rises, Stevens added:

With the second half of the year and the likelihood of increasing central bank rates putting upward pressure on funding costs, Harmoney's hedging program, with around 73% of floating rate borrowings hedged, dampens this impact over the course of the year.

Shareholders will be updated with the company's official FY22 results on 31 August.

Share price snapshot

Harmoney shares have jumped 10% in the past week and around 3% in the past month.

However, this ASX financial company's shares have lost 63% in the past year, and 54% year to date.

For perspective, the benchmark ASX 200 index has lost nearly 9% in the past year.

Harmoney has a market capitalisation of about $83 million based on the current share price.

Motley Fool contributor Monica O'Shea 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 Scott Phillips.

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