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Slovar Limited AGM Information 2019
17773_rns_2019-11-14_735e2372-0348-40a3-beeb-b0e04bc1cf6b.pdf
AGM Information
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ASX: MNY
money3
A NEW SET OF WHEELS
AGM PRESENTATION
15 NOVEMBER 2019
Scott Baldwin
Managing Director
Siva Subramani
Chief Financial Officer
About money3
A customer-focused auto-loan specialist providing competitive loans to consumers.
Strong brands in Australian and New Zealand.
20 years consumer lending experience and over 10 years specialising in auto loans.
In excess of $1b worth of loans originated for consumers.
Originating over $1m in loans every business day.
Our prudent and successful approach to customer care and collections management.
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Board of Directors
Stuart Robertson
Non-Executive Director & Chair of the Board
Qualification
B.Com ACA FINSIA GAICD MBA
Kate Robb
Non-Executive Director & Chair of the Audit & Risk Committee
Qualification
B.Acc. ACA
Symon Brewis-Weston
Non-Executive Director & Chair of the Remuneration & Nomination Committee
Qualification
B.Econ (Hons), Masters in Applied Finance
Scott Baldwin
Managing Director & Chief Executive Officer
Qualification
Dip. Finance, GAICD, MBA, B.Eng. (Hons)
Terri Bakos
Company Secretary
Qualification
B.Acc. ACA, ACIS
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Executive Management
Craig Harris
General Manager
Money3 (Australia)
Craig joined Money3 as Chief Financial Officer in 2009 and is currently focused on the growth of the secured automotive lending (Australia).
Roy Gormley
Chief Executive Officer
Go Car Finance (New Zealand)
Roy owned Go Car Finance group prior to acquisition and brings extensive experience to the team in the consumer lending sector in New Zealand.
Michael Neville
Chief Operating Officer
Money3 (Australia)
Michael joined Money3 in June 2019 and brings a wealth of experience in team leadership, sales, marketing and business strategy development and execution across several industries. Michael is focused on leading productivity enhancements across the group.
Siva Subramani
Chief Financial Officer
Money3
Siva joined Money3 in 2017 as the Head of Treasury before being appointed Chief Financial Officer in 2018. Prior to joining Money3 Siva was a Director with PwC providing assurance and advisory services in the banking and capital markets sector specialising in the asset-finance sector.
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FY19 - Highlights
| FOCUS
Taken strategic decision to focus on the provision of secured automotive loans | STRONG CASH POSITION
Sold branch network and Cash Train business (now paid in full) which increased cash reserves by $45m along with large funding headroom | GROWTH & CAPABILITY
Entered ASX300 and added to executive team enhancing capability for growth |
| --- | --- | --- |
| IMPROVEING CREDIT QUALITY
Exited Small Amount Credit Contract Lending | GEOGRAPHIC EXPANSION
Acquired Go Car Finance in New Zealand expanding addressable market | PRODUCT EXPANSION
Launched new products to expand our addressable market of new and pre-owned vehicles |
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FY19 - Highlights: Growth and performance continues
Increased market share: 1 in 500 registered vehicles in Australia currently have a loan with Money3 | 1 in 800 registered vehicles in New Zealand currently have a loan with Go Car Finance
48% Gross loan book growth
Increased New Zealand 'debt funding head room' with the Bank of New Zealand
25% Revenue growth
Normalised NPAT of $35m
Paid 10 cent fully franked dividend
FY19 - Financial results
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24.6%
Increase in revenue
17.3%
Increase in Group EBITDA
14.2%
Increase in Group NPAT
Continuing Operations
| Group Financial Results
(continuing operations)
Amounts in $m unless otherwise stated | FY19 | FY18 | Mvt % |
| --- | --- | --- | --- |
| Revenue | 91.7 | 73.6 | 24.6% |
| Expenses | 42.2 | 33.1 | 27.5% |
| Expenses (One-off) | 2.0 | - | |
| EBITDA | 47.5 | 40.5 | 17.3% |
| EBITDA as % of revenue | 51.8% | 55.0% | |
| NPAT | 24.2 | 21.2 | 14.2% |
| NPAT as % of revenue | 28.4% | 28.8% | |
| EPS (Basic)
cents per share | 13.48 | 13.17 | 2.4% |
Note: Expenses increased as a result of:
- One-off Go Car Finance acquisition and integration costs
- One-off Government expenses of SACC related businesses
- Revenue growth to exceed expense growth in FY20 as acquisition and investment synergies take effect
Strong cash position receiving $45m as a result of sale
Funding capacity supports over $125m in gross loan book growth
FY20 NPAT growth forecast to exceed 25% from continuing operations
Expanding addressable market by geography and product
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FY19 - Collections
- Best in class customer care team managing over 50k active accounts
- Strong cash collections up 22% Q1 pcp
- Material improvement in bad debt performance*
- Well proven customer management processes
*Targeting 4.5% - 5.5% in bad debts for FY20
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FY20: A new set of wheels
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FY20 - Strategic focus
Revenue growth
- Sales and marketing initiatives targeted at expanding addressable market
- Product expansion into new and preowned vehicles, lifting credit quality
- Strong focus on returning customers
- Returning customer program in New Zealand (leveraging Australian model)
- Expanding profit share model with dealers in New Zealand
- Making the most of the current market opportunity – banks have reduced appetite for vehicle finance in Australia
Technology
- Investing in smart and innovative technology to improve growth, scale and customer experience
- Streamlining loan decisioning process
- Increasing 3rd party integration driving improved data quality and speed of lending decisions
- Enhancing customer experience through simpler user-friendly application processes lowering turn around times
- Providing payment options allowing customer to make payments 24 hours a day
Funding
- Accessing to wholesale credit markets to increase funding capacity to support growth of loan book
- Improving funding terms, lowering overall cost of debt
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AU - Strong growth in originations / settled loans
New products launch growing monthly loan originations
35% Australian loan application growth in Q1 pcp
26k Loans forecast to be originated in FY20
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NZ - Strong growth in originations / settled loans
FY19 represents the post acquisition period (five months ended 30 June 2019)
New product launch growing monthly loan originations
Strong application volume and increased access to funding
Circa 5k Loans forecast to be originated in FY20
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AU - Gross loan book growth
Strong FY20 loan book growth (replacing divested divisions) will underpin record FY21 NPAT
Expect new debt facility (FY21) to support growth, improve scale and profitability
New originations are improving the quality of the gross loan book - now targeting 4.5% to 5.5% bad debts
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NZ - Gross loan book growth
Strong FY20 loan book growth will underpin record FY21 NPAT
Increasing debt facility to support growth, improve scale and profitability
New originations are improving the quality of the gross loan book and improving loss experience
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Product Expansion - Australia
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Australian vehicle loans now up to $50,000
| Broader market appeal to all customer segments, leveraging our 500k customer database | Targeting growth of near prime customers with credit scores above 600 | Targeting returning customers with preferential rates and dedicated team | New products launched targeting a greater share of the $6b^{1} used vehicle finance market | Entering the $14b^{1} new vehicle finance market |
|---|---|---|---|---|
1 ARS, 5671.01 on page 3.0. Australia, November 2018 (14 August 2019) Table 9 – Finance Commitments, for Motor Vehicles: Australia, http://www.ars.gov.au/ausstats/[email protected]/mf/5671.0>
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Geographic Expansion - New Zealand
Go Car Finance
Goes way further
96% of clients would recommend Go Car Finance*
Wide product range addressing all client credit profiles
Innovative products to address the life cycle of car ownership – make the weekly payment all encompassing
Access to funding has allowed us to lift dealer engagement
*Internal customer satisfaction survey conducted in 2019
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Technology - Growing advantage
Flexible application processes for customers
- Simpler application process
- Improve integration with 3rd party providers
- Reduce time to decision
- Simplify document delivery
A NEW SET OF WHEELS
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money3
We'll Give You a Fair Go!
Funding - Enabling growth
Long runway for new loans with $50m of undrawn debt facility and $30m of cash reserves
In active discussions with financial institutions to increase funding capacity and lowering costs
In active discussions to add an additional bank to existing syndicated facility expanding funding capacity
Lending capacity to support over $125m in gross loan book growth
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Q1 FY20 - Update
| Unaudited Group Financial Results
(continuing operations)
Amounts in AUD m unless otherwise stated | Q1 FY20 | Q1 FY19 | Mvt % |
| --- | --- | --- | --- |
| Revenue | 30.5 | 20.5 | 48.8% |
| Expenses | 14.5 | 10.0 | 45.0% |
| Expense (One-off reallocation of corporate overhead) | 1.2 | - | |
| EBITDA | 14.8 | 10.5 | 41.0% |
| EBITDA as % of revenue | 48.5% | 51.2% | |
| NPAT | 7.5 | 4.9 | 53.1% |
| NPAT as % of revenue | 24.6% | 23.9% | |
Over 25% growth in NPAT forecasted for FY20 underpinned by a 35% increase in loan applications in Q1 pcp
Strong organic growth with record Q1 & October lending volume has the business well placed for strong Revenue growth in both FY20 & FY21
EBITDA margins improving post divestment reallocation of corporate overheads
Sustainable and strong NPAT margin circa 25% in a growing business with scale upside expected in FY21
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FY20 - Outlook
Strong lending momentum anticipating over 25% loan book growth
| NPAT forecast in excess of $30m | Expanding addressable market with new lending products | Exploring complementary acquisition opportunities | Dividend for FY20 anticipated to be 10 cents |
|---|---|---|---|
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Appendix - Corporate Information
Capital structure
| Shares on issue | 183.55m |
|---|---|
| Share Price as at 11/11/19 | $2.05 |
| Market capitalisation | $376.28m |
| Deployable funds (Oct 19) | $80m |
| Dividend per share (FY19) | 10 cents |
money3
Disclaimer
The content of this presentation has been prepared by Money3 Corporation Limited (the Company) for general information purposes only.
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.
money3
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money3
Investor Relations
Simon Hinsley
Mobile: +61 401 809 653
[email protected]
Media Relations
Warrick Lace
Mobile: +61 404 656 408
[email protected]
Managing Director
Scott Baldwin
Telephone: +61 3 9093 8255
[email protected]
Chief Financial Officer
Siva Subramani
Telephone: +61 3 9093 8255
[email protected]