investor presentation results - 1h fy21
TRANSCRIPT
1
Scott Baldwin
Managing Director
Siva Subramani
Chief Financial Officer
16 February 2021
ASX: MNY
Investor PresentationResults - 1H FY21
2
Market leading collections via our
Customer Care teams
Strong proprietary technology
allowing for seamless integration of
third party loan books
About
2
Customer focused,
Consumer & Commercial
finance company
Strong brands across
Australian and New
Zealand
Large addressable market
across Australia & New Zealand
covering new and used assets
for consumers and commercial
purposes
Group now funding over $30m
of asset purchases a month
Ubiquitous customer
journey from introducer
to loan settlement –
driven by proprietary
technology with strong
integration with
introducers software
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Money3 Group – growing addressable market opportunity
Near prime & non-conforming loans –
New Zealand
• $122m loan book (January 2021)
• NZ$9.5b2 annual motor vehicle sales
• Go Car estimates it finances <1% of the total
car market
• 1/700 vehicles funded by Go Car Finance
• Funding expansion in 2021
Products
• Automotive Loans (Consumer)
• Vehicle compliance & maintenance services
• Loan protection waivers
Products
• Automotive loans (consumer)
• Automotive loans (commercial)
Products
• Automotive loans (consumer)
• Personal loans (consumer)
Near prime Consumer & Commercial -
Australia
• $47m loan book (January 2021)
• Annual market opportunity - $3bn1 in used
vehicle financing to near prime applicants
• Large annual market opportunity in new
Consumer and commercial assets
• Less than 1% market share providing a huge
opportunity to grow
Non-conforming loans -
Australia
• $381m loan book* (January 2021)
• Annual market opportunity – >$1bn1 – used
vehicle financing to sub prime applicants
• 1/450 registered vehicles in Australia funded
by Money3
1 Money3 estimates 2 December 2020 Motor Fax published by the Financial Services Federation
*includes GMFA acquisition loan book (acquisition completed 2 February 2021)
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1H FY21 Highlights
• Acquired Automotive Financial Services (AFS) broadening addressable
market and adding $46.7m (end of January 2021) to Group’s loan book;
• Acquired GMF Australia Pty Ltd (GMFA), a subsidiary of General Motors
Financial Corporation Inc, adding $23.3m to the loan book;
• Strong start to 2H FY21 with continued outperformance in
customer collections as a result of a market leading Customer Care team
that leverages strong proprietary tech;
• Oversubscribed capital raise – adding $52m equity to fund acquisitions and
loan book growth;
• Record cash collections in 1H FY21 $165m up 23.6% over pcp;
• Credit Quality of book continues to improve which will lead to an on
going reduction in impairment provisions;
• Secured $250m warehouse facility with Credit Suisse –$10m reduction in
cost of funds when fully deployed;
• Secured $55m warehouse facility with Westpac.
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Strong loan book growth
Strong book growth via
organic growth
and acquisition at start
2H, providing a solid
foundation for underpin
FY22 results
151
214253
373
434474
550
0
100
200
300
400
500
600
FY16 FY17 FY18 FY19 FY20 Dec-20 Feb-21
Loan Book
($m)
Acquisitions drive strong start to
2H FY21
95.6%
1.8%
2.6%
Loan Book - Feb 2021Auto - Consumer Auto - Commercial Personal
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Highlights – 1H FY21
Loan bookincreased
11.1% on pcp, 9.3%
increase since
June 30
Cash collected increased
23.6% to $165.0mon pcp
New loan
originations(cash advanced)
9.3%increase on pcpto $151.1m
EBITDAincreased
32.8% to $40.5m on pcp
Revenueincreased
8.3%to $67.9m on pcp
Good credit quality driving a reduction
in bad debts and improving impairment
provisions
Funding and strategic partnerships has
allowed New Zealand to take market
share
Strong positive cashflow impact from
government stimulus allowing customers
to pay out loans earlyNPATincreased
26.8% to $19.9m on pcp
Strong loan origination growth despite
Victorian and Auckland lockdown
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1H FY21 Financial Results (unaudited)
Group Financial Results(Continuing operations)
Amounts in $m unless otherwise stated
1H
FY21
1H
FY20
Mvt %
Revenue 67.9 62.7 8.3%
Bad debts, net (7.6) (9.7) (21.6%)
Movement in impairment provisions (0.4) (2.8) (85.7%)
Expenses (19.4) (19.7) (1.5%)
EBITDA 40.5 30.5 32.8%
EBITDA margin 59.6% 48.6%
NPAT 19.9 15.7 26.8%
NPAT Margin 29.3% 25.1%
8.3%Increase in
Revenue
32.8%Increase in
EBITDA
26.8%Increase in
Group NPAT
Loan Book$474.0m
31 December 2020
1H FY21 Financial Results
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Increasing trend in Amount Financed Australia$101.4m cash advanced in
1H FY21
Increase in Group’s
cash advanced on pcp
9.3%$22.5
$24.6$22.9
$10.0
$17.4
$23.2
$26.6
$21.0
$25.2$26.7
$32.6 $31.7
-
500
1,000
1,500
2,000
2,500
$0
$5
$10
$15
$20
$25
$30
$35
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20
Amount Financed - Group
Amount Financed Loan Count
$m Count
Lock downNew Zealand$49.7m cash advanced in
1H FY21Lock down
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Improving credit quality
Improving credit
quality driving down
impairment provision
requirements and
improving EBITDA
Positive impact on “Strong”
credit quality customers as a
result of Customer Care
initiative and Government
stimulus
49.1%
47.7%
46.2%
53.8%
23.5%
26.0%
31.8%
26.7%
23.4%
22.6%
18.5%
17.2%
1.8%
2.3%
2.6%
2.1%
2.2%
1.4%
0.9%
0.1%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
FY18
FY19
FY20
1H FY21
Strong Good Watch List Sub-standatd Credit impaired
Credit quality should
continue to improve with
recent acquisitions
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Funding – very solid foundation
• $250m warehouse facility with Credit Suisse – providing for a $10.0 million interest expense saving when fully deployed,
• $150m funding facility with FCCD (Fortress Australia) – scheduled to be repaid at the end of FY21,
• $55m warehouse facility with Westpac – supporting the growth of Automotive Financial Services
• $8.5m funding facility with Australian Office of Financial Management
• Over subscribed $52m equity raise to fund further loan book growth and acquisitions
• $70m cash on hand at the end of January 2021
• In advanced negotiation with a New Zealand bank for a $40m debt facilityto support the growth of Go Car Finance
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AFS acquisition
1 https://afico.com.au/2 AFICO - AFS secures S&P Global Ratings 3 AFICO - Westpac increases senior debt (source: https://afico.com.au/)
Strategic
fit
Acceleration
into near prime
automotive segment
Servicing several
hundred Dealer
Groups1
Strong loan
book quality2
Earnings
accretive
Funding
diversification
from large
Australian bank3
Successful business
model and
experienced
management team
Lot of similarities
with the Go Car
acquisition in
2019
Acquisition completed on 4 January 2021
FY22 Revenue(forecast)
~$14m
FY22 NPAT(forecast)
~$~2.5m
Strong loan book quality
30+ days arrears less
than 1% of book
Purchase consideration
$10.8m
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1HFY21 - New Zealand Growing from strength to strength
Cash
collections
up 44.2% to
$27.7 on pcp
Loan Book$115.0m
up 39.0% on
June 2020
• Go Car finance acquisition completed in March 2019
• Strong strategic fit with group
• Growing contributions to loan book growth (Loan book doubling
since acquisition) and profitability
• 20.6% contribution to group revenue and growing
• 1/700 registered vehicles in New Zealand financed with
significant opportunity to grow market share
• Margins expected to improve with loan book growth
• Has maintained Group growth during Victorian lockdown period
• Good blueprint for Automotive Financial Services acquisition
Cash
advanced
up 70.1% to
$49.7m on pcp
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Group - Gross loan book growth
Expanding addressable market & market
share is driving strong growth
momentum, group now advancing over
$1.5m per day in new loan origination
341 391
195
400536
791
0
200
400
600
800
1000
Oct-20 Post cap raise & new debt facilities*
Capital Structure – loan book capacity
Equity^ Debt
(AUDm)
*Includes $40m debt facility offer from a NZ Bank^Includes deferred revenue impairment provision on loan book
Existing debt facilities support loan
book growth to ~$800m#
Return on Equity (RoE) to grow
towards 20% with increasing leverage
as new debt facilities are utilised
253373
434
600
0
200
400
600
800
1,000
FY18 FY19 FY20 FY21 .. 2024
Gross Loan Book(AUDm)
Forecast
$1bn
Aspiration
#assumes fortress is repaid at the end of FY21
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Forecast NPAT $36m
• FY21 forecast takes into consideration the continuing uncertainty around COVID-19 with the following assumptions;
• No prolonged lockdowns occurring in the reminder of the financial year;
• Stability in unemployment rates;
• Announced Government stimulus packages remaining in place until March 2021; and
• Anticipate paying 9 cents in dividends for FY21.
Target Loan book ~$600m by end of FY21
• Strong loan book growth and significant improvement in the cost of debt will provide the foundation a significant uplift in NPAT and ROE
Continue to pursue strategic acquisitions to add scale in terms of product or distribution channels
FY21 - Outlook
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Appendix 1 – Corporate Information
CAPITAL STRUCTURE
ASX 300 Company
Shares on issue 207.6 million
Share Price (15th February 2021) $2.87
Market capitalisation $595.8 million
Earnings per share (1H FY21) – Basic 10.64 cents
Dividends per share (interim) 3.00 cents
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Share Price – 12-months
16
114.3
137.3
0
30
60
90
120
150
1H FY20 1H FY21
Australia – Cash Collections$m
19.2
27.7
0
6
12
18
24
30
1H FY20 1H FY21
New Zealand – Cash Collections$m
Appendix 2 – Cash collections
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The content of this presentation has been prepared by Money3
Corporation Limited (the Company) for general information
purposes only.
Any information included in this presentation on COVID-19’s impact
on future financial performance, including industry sectors, income,
profit and employment types, represent estimates of
management. However due to the unprecedented nature of the
events, these views are inherently uncertain and Money3 takes no
responsibility for the accuracy of such views.
Any recommendations given are general and do not take into
account your personal circumstances and therefore are not to be
taken as a recommendation or advice to you.
You should decide whether to contact your financial adviser so a
full and complete analysis can be made in respect to your personal
situation.
Whilst all care has been taken compiling this presentation neither
the Company nor any of its related parties, employees or directors
give any warranty with respect to the information provided or
accept any liability to any person who relies on it.
Disclaimer
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Managing Director
Scott Baldwin
Telephone: +61 3 9093 8255
Email: [email protected]
Chief Financial Officer
Siva Subramani
Telephone: +61 3 9093 8246
Email: [email protected]
Investor Relations
Simon Hinsley
Telephone: +61 401 809 653
Email: [email protected]