We're pleased to announce our full-year results for the 2022 financial year.
- Record loan originations of $1.1 billion, up 134% year-on-year
- Record loan book of $1.3 billion, up 111% year-on-year
- Record interest revenue of $87.3 million, up 72% year-on-year
- Delivered market-leading credit performance with a 0.54% net loss rate
- Delivered full year Cash NPAT of $0.5 million, with second half Cash NPAT of $2.7 million
- Delivered on FY22 growth, profitability and efficiency objectives ahead of target dates
- Commercial automotive loan launched, with a market-leading customer experience, approximately doubling the size of Plenti’s automotive loan target market
- Entered partnerships with several large energy retailers and a funding agreement with an electric vehicle manufacturer
- Materially reduced cost-to-income ratio, evidencing operating leverage inherent in Plenti’s technology-led business model
- Delivered enhancements to proprietary technology platform, further improving customer experiences and speed of service
- Further diversified funding sources and reduced funding costs via first asset-backed securities (ABS) transactions
Daniel Foggo, CEO and founder, said:
“Achieving positive cash NPAT is a major milestone for Plenti and a testament to the strength of our technology-led business model and talented team. It rounds out what has been an exceptional year of growth as we continue to capture market share in all lending verticals and set new industry standards.
“Underpinning this is a relentless focus on delivering exceptional experiences and growth initiatives. With our diverse funding options, continually improving operational efficiencies as we scale, and strong risk management track record, we are well placed to continue delivering profitable growth.”
Loan origination and loan portfolio growth
Plenti achieved strong loan origination growth in the year to 31 March 2022, up 134% on FY21. Growth was particularly strong in automotive finance, where annual loan originations of $639 million were 177% above the prior year. Renewable energy originations grew to $98 million, 72% above the prior year. Personal lending grew to $365 million, 100% above the prior year.
This growth was achieved whilst also further enhancing the average credit profile of borrowers. The average Equifax credit score on the loan portfolio increased from 821 at the start of the period to 838 at the end of the period.
Plenti’s total loan portfolio grew 111% to $1.3 billion at 31 March 2022, comprising $745 million in automotive loans, $142 million in renewable energy loans and $413 million in personal loans.
Revenue and positive Cash NPAT generation
Note: ‘4QRR’ revenue represents run-rate in 4Q22 (i.e. January to March 2022 revenue multiplied by four). 4Q22 Cash NPAT is shown on an absolute basis, not a run-rate basis.
Plenti’s larger loan portfolio generated interest revenue of $87.3 million, up 72% on the prior year.1 The Company continued to demonstrate the operational leverage inherent in its technology-led business model by materially reducing its cost-to-income ratio to 48% from 55% in the prior year. The cost-to-income ratio reduced to 44% in the second half. Strong revenue growth and continual operational efficiency improvements translated into a positive Cash NPAT result for the year of $0.5 million. Cash NPAT in the second half of the year was $2.7 million.
Plenti delivered significant advancements in its technology platform across customer experience, credit decisioning and pricing, as well as partner integrations. Plenti has over 40 staff working in product and technology, helping it to continually innovate, drive loan origination growth and increase operational efficiency.
Plenti delivered a strong credit performance reflecting the prime nature of its loan portfolio. The net credit loss rate for the year was 0.54%, down from 0.96% in FY21. 90+ day arrears were at 0.26% at the end of the year, versus 0.31% at the end of FY21. The strength of this credit performance in part reflects Plenti’s deliberate shift towards lower-risk automotive and renewable energy loans, which now represent ~68% of the loan portfolio.
1 Total FY22 revenue was $88.5 million, 67% above the prior year
Financial position and funding
Plenti further diversified and deepened its funding sources during the year. Plenti established a third warehouse facility, with a specific tranche to fund electric vehicles. It also completed two ABS transactions across ~$580 million of loan receivables, reducing funding costs and Plenti’s equity funding contribution to these receivables. Combined with lower funding costs from its retail platform, these reduced the overall funding rate in the second half to a record low.
Plenti entered into a corporate debt facility agreement in March 2022 with an Australian funder to provide capital to support its ongoing business growth. The facility limit is linked to the size of Plenti’s securitised loan portfolio, providing the ability to access more capital in line with loan book growth. The facility was initially drawn to $18 million.
Growing expectations of central bank rate increases meant Plenti experienced increases in funding costs on new loan originations during the latter part of the year. Higher funding costs on new loan originations have been partially mitigated through increases in borrower rates. Plenti expects borrower rates to continue to increase over the coming months as the market adjusts to higher funding costs.
Strategy and outlook
Plenti’s strategy is to establish market leadership positions in each of its segments, extend its product and technology advantage and optimise its funding.
Plenti’s focus in the first half of FY23 will be on the yield it achieves on new loan originations while driving further operational efficiencies. It will return to focusing on achieving market share gains in the second half. Cash NPAT is expected to increase in FY23, weighted towards the second half.
Plenti’s FY23 priorities are set out below:
|Growth||Remain on track to achieve a $5bn loan portfolio in 2025 |
|Profitibility||Continue full year Cash NPAT profitability growth |
|Efficiency||Reduce cost-to-income to < 40% |