Australia’s Digital Lender MONEYME Returns to Statutory Profits

Digital lender MONEYME (ASX:MME) has just released a trading update announcing it has returned to statutory profits “ahead of target, making it potentially the first fintech in Australia to return to profitability following recent challenging market conditions.”

MONEYME has “delivered >$8m NPAT and record revenue for 1H23, after previously shifting from profitability achieved prior to listing on the ASX, and through to a high growth strategy during the listing.”

This recent delivery of statutory profit puts MONEYME “ahead of its fintech peers in the race to profitability, and is particularly impressive given current market conditions.”

Digital lender and non-bank challenger MONEYME returned to statutory profits ahead of target, “delivering a record >$8m in net profit after tax (NPAT) and record revenue of >$117m for the first half of FY23 (up >143% pcp) beating analysts’ expectations.”

MONEYME reported “greater than $60 million in gross revenue for the quarter in its 2Q23 trading update, reflecting year-on-year revenue growth of more than 140 percent.”

The strong revenue flows are “expected to continue as the full benefit of 4x’ing the loan book in FY22 is realised. As a result, MONEYME has increased its full-year gross revenue target from >$200m to >$220m.”

MONEYME announced “its shift in focus to statutory profits at the beginning of FY23, following two consecutive years of high growth and statutory losses in FY21 and FY22.”

The return to “a positive NPAT result in 1H23 was accelerated by a swift execution of MONEYME’s strategy to moderate growth, maintain its margins in a rising interest rate environment, and deliver cost synergies from the SocietyOne acquisition.”

Core operating expenses to the loan book “reduced to less than 3% in the second quarter (down from 11% in 2Q22, and 5% in 1Q23).”

The improvement in cost efficiency is “driven by economies of scale from high organic and inorganic growth in FY22 and the realization of substantial cost synergies from migrating SocietyOne’s technology onto MONEYME’s proprietary technology platform, Horizon.”

While MONEYME’s loan book has “remained relatively steady in line with its moderated growth strategy, sitting at $1.24 billion at the end of the first half, the credit profile of the book has continued to improve.”

The Group’s focus “on managing credit risk and originating higher credit quality assets has increased the book’s average Equifax score to 714 at the end of the first half, up from 704 at the end of FY22 and 672 in 1H22.”

MONEYME’s car finance product, Autopay continues “to drive a shift to secured assets. Secured assets as a percentage of the book increased to 41 percent at the end of the first half, up from 38 percent at the end of FY22.”

Clayton Howes, CEO & Managing Director of MONEYME said:

“We are pleased to announce statutory profits and record revenue in the first half, beating analyst expectations. Building from strong results in the first quarter, the momentum continued into the second quarter and has seen us upgrading our outlook on revenue and profit for the full year. Our return to statutory profitability after a prolonged period of high growth is not only a result of a shift in near-term business strategy in response to the macro environment, it is also a continuation of our commitment to drive profitable growth and a testament to the quality and proficiency of our team.

As noted in the update:

“We are proud of the agility and adaptability that MONEYME has demonstrated in navigating rising interest rates and we are ready to take advantage of the market opportunity in car financing and the potential tailwinds from changing BNPL regulation. With SocietyOne successfully integrated into the business, we are looking forward to solidifying our position as a leading non-bank challenger. It is also pleasing to note the business is progressing this agenda alongside the delivery of strong ESG outcomes that I expect to be reflected in B-Corp certification in due course.”

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