Release Date: February 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- MoneyMe Ltd (ASX:MME, Financial) delivered a solid first-half result with $6 million in net profit after tax, reflecting technology-driven cost efficiencies and strong credit performance.
- The company increased originations while maintaining a stable book balance and shifting to a high credit quality asset base.
- MoneyMe Ltd (ASX:MME) achieved B Corp certification and was awarded ESG and sustainability initiative of the year.
- The company's net promoter score increased to 68, up from 60 at the end of FY23, indicating high customer satisfaction.
- MoneyMe Ltd (ASX:MME) successfully executed warehouse financing renewals and maintained a healthy net interest margin of 10% despite interest rate increases.
Negative Points
- Revenue reduced to $103 million in the first half of 2024 compared to $114 million in the second half of 2023.
- Operating expenses, although reduced, still reflect the challenges of a high-cost environment.
- The company's net interest margin slightly reduced from the prior half, indicating pressure from rising interest rates.
- MoneyMe Ltd (ASX:MME) faces ongoing external risk factors such as cost of living pressures and macroeconomic uncertainties.
- The transition to a higher credit quality book resulted in lower associated yields, impacting overall revenue.
Q & A Highlights
Q: Can you provide more details on the factors driving the $6 million net profit after tax for the first half of FY24?
A: Clayton Howes (CEO): The $6 million net profit after tax was driven by technology-driven cost efficiencies, strong credit performance, and effective interest rate management. We increased originations while maintaining a stable book balance and shifted our loan book composition to higher credit quality assets.
Q: How has the credit quality of your loan book changed over the period?
A: Neal Hawkins (CFO): The average Equifax credit score of our loan book increased to 741, with 48% of assets being secured. This stronger credit profile has resulted in a reduction in net loss rate to 4.6% for the first half of FY24.
Q: What strategic initiatives did Moneyme undertake in the first half of FY24?
A: Clayton Howes (CEO): We increased the ratio of secured assets, invested in automation, strengthened customer data protection, simplified our product portfolio, and executed planned warehouse renewals. Additionally, we achieved B Corp certification and were awarded ESG and sustainability initiative of the year.
Q: How is Moneyme positioned to handle the current macroeconomic environment?
A: Clayton Howes (CEO): Our largely variable rate book allows us to adjust customer pricing to protect margins in a rising interest rate environment. Our moderated growth strategy and transition to high credit quality assets with an increased secured asset mix safeguard the business against external risks such as cost of living pressures.
Q: Can you elaborate on the performance and future outlook of your car loan product, Autopay?
A: Clayton Howes (CEO): We grew secured car lending and enhanced our competitive advantage in this sector with further improvements to Autopay. We also launched Autopay for caravans through a strategic partnership. We see significant market opportunity in the car loan market and plan to capitalize on it.
Q: What are the key financial highlights for the first half of FY24?
A: Neal Hawkins (CFO): We delivered a statutory profit of $6 million, up from $3 million in the second half of 2023. Net revenue was $103 million, and operating expenses were $97 million. Our net interest margin remained healthy at 10%, and we expect to post a positive statutory profit for the second half of FY24.
Q: How has Moneyme's customer satisfaction and engagement been affected by the current economic conditions?
A: Clayton Howes (CEO): Despite rising interest rates, customer satisfaction and engagement remained strong. Our net promoter score increased to 68, and our Google review ratings remained at 4.6 out of 5. Additionally, 34% of our customers have two or more products with us.
Q: What are Moneyme's plans for leveraging artificial intelligence?
A: Clayton Howes (CEO): We are investing in AI for fraud prevention and cybersecurity. We are also developing applications leveraging generative AI to enhance customer service interactions and operational efficiency. A beta version of an internal tool aimed at improving customer service response speed and accuracy is set for release in the second half of FY24.
Q: How does Moneyme's B Corp certification impact its business strategy?
A: Clayton Howes (CEO): Our B Corp certification reflects our commitment to high sustainability standards and ESG initiatives. It allows us to measure and verify our impact against an internationally recognized framework, providing reassurance to stakeholders. Sustainable business practices are integral to our strategy and have been proven to outperform over time.
Q: What is Moneyme's strategy for future growth beyond FY24?
A: Clayton Howes (CEO): We will continue to extend our technology advantage through product innovation, automation, and expanded AI capabilities. We aim to capitalize on the significant market opportunity for our car loan product, grow our operating leverage, optimize the business for future growth, and strengthen our cybersecurity defenses.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
