HMY - Harmoney Corp Limited

[Muse]

how hard would it be to tell us how big the loan book is currently? bemused

Aye - there are no accounts to close off and review. Lots of long weekends between quarter end and now as rawz points out, but I wouldn't be surprised if management know what the book size is and originations on a day to day basis.

Which is why I suspect tomorrow's release may contain some 'news' .

[thegreatestben]

https://www.nzx.com/announcements/391075

27 April 2022
ASX / NZX RELEASE
HARMONEY LOAN BOOK REACHES $627 MILLION; FURTHER RECORD QUARTER LOAN ORIGINATIONS; REAFFIRMS FY22 GUIDANCE
Harmoney Corp Limited (ASX/NZX: HMY; “Harmoney” or “the Company”) is pleased to provide an update on its performance for the quarter ended 31 March 2022 (Q3 FY22).
Key Q3FY22 highlights (vs Q3FY21):
• Group loan book reached NZ$627 million up 29%; up 13% quarter on quarter (QoQ)
• Group originations up 80%; up 24% QoQ
• FY22 proforma Cash NPAT demonstrates superior economics of Harmoney’s 100% consumer-direct business model and success in the Australian market
• Australian new customer originations up 218% to A$63.8 million; up 58% QoQ
• Australian loan book up 107%; up 29% QoQ to A$239 million
• Australian originations have now materially surpassed NZ originations, proving the success of Harmoney’s 100% consumer-direct model in the larger Australian market
• Key lead indicators of increased account acquisition, new loan originations and net lending margin set to drive cash profitable growth in FY23 and onwards as existing customers return for future needs with minimal customer acquisition cost
• Australian existing customer originations annuity building; up 176% to A$16.8m (21% of Australian originations). Existing customers generate ~50% of New Zealand originations, with New Zealand showing the benefits of a longer-established consumer-direct portfolio
• High-quality loan book with 90+ days arrears at 0.46%, down from 0.53%
[Please see table on page 1.]

Commenting on Harmoney’s Q3FY22 performance, CEO & Managing Director David Stevens said:
“Harmoney continues to deliver outstanding results. With our loan book now at $627 million, the business is already Cash NPAT profitable on a proforma basis. This was another successful quarter for Harmoney as we continue to expand our business in the Australian and New Zealand markets.
“Australia’s market opportunity is nine times larger than New Zealand, and Harmoney’s Australian new customer originations grew 218% on the prior corresponding period. This coupled with a high level of automation on our proprietary Stellare® lending platform, positions us for further scalability and will drive higher cash profitability for Harmoney in FY23 and beyond.
“Harmoney’s consumer-direct marketing technology is world-class and consistently generates over 10,000 new customer accounts per month. This enables our team to focus solely on developing lending and product enhancements that broaden our ability to provide financial products to more Aussies and Kiwis with no additional customer acquisition cost.”
Total quarterly originations are outlined in the table below:
[Please see table on page 2.]
Harmoney’s data-driven marketing program leads to a significant increase in new customer originations at a reducing customer acquisition cost. Growth in new customers, attracted to Harmoney’s simplicity, convenience and competitively priced interest rates, typically provides a nine-to-twelve-month lead indicator for future existing customer originations. This is due to Harmoney’s unique 100% consumer-direct lending model, which supports and enhances a customer’s growing borrowing needs without having to pay a customer acquisition cost for those customers, unlike other origination models.
LOAN BOOK GROWTH FURTHER ACCELERATES
At 31 March 2022, Harmoney’s loan book was NZ$627 million, an increase of 29% on pcp. The Australian loan book grew 107% to A$239 million. The New Zealand loan book grew by 2%, however was impacted by changes to consumer credit law that came into effect on 1 December 2021. These changes apply to all providers of consumer credit in New Zealand (including banks). The Government is currently reviewing the impact of these changes on lenders, and intends to make further changes to curb any unintended consequences.
[Please see table on page 3.]

Additionally, a strong credit performance was maintained due to Harmoney’s high-quality loan book, with Group 90+ day arrears at 31 March 2022 of 0.46%, down from 0.53% pcp.
Harmoney at 31 March 2022 has over $200m in undrawn debt funding lines to facilitate loan book growth which is provided by three of the Big 4 banks.
In Harmoney's 31 December 2021 half year report, the review of operations on page 8 incorrectly reported pro forma funding debt (period end) as $482million, this amount should have been $525million. This correction doesn’t impact any published pro forma ratios or the statutory financial statements.
FY22 GUIDANCE REAFFIRMED
Given the Company’s performance for the 9 months to 31 March 2022, Harmoney is pleased to reaffirm previous FY22 guidance of:
• Group pro-forma loan book greater than NZ$650 million (30%+ growth on FY21)
• Group pro-forma revenue of at least NZ$92 million (16%+ growth on FY21)
• Net lending margin of at least 8.3% (150bps+ growth on FY21)
• Pro-forma Cash NPAT profitable for the year ending 30 June 2022
• Transition to warehouse funding is expected to be ~90% complete by 30 June 2022 (87% complete at 31 March 2022).
All numbers in this release are unaudited. This release was authorised by the Board of Harmoney Corp Limited.
-END-

[Muse]

Rawz you win the golden gong I was too conservative on Aussie growth

[Rawz]

Probably see some Q3 numbers tomorrow or the next day.

My guess:

Aus book: $235m 91% up on pcp
NZ book: $378.5m 5% up on pcp
Total book: $623m 28% up on pcp

All good

Yes fairly close. Aussie is creaming it

Aus book: $239m 94% pcp growth
NZ book: $370m 2% pcp growth
Total book: $627m 29% pcp growth


Aussie is a super star. 29% qrt on qrt growth. Record quarterly growth.
Q3 growth higher than Q2 (christmas quarter) which is usually its largest. The numbers are quite incredible.

90 day arrears 0.46%

[jimdog31]

Yes fairly close. Aussie is creaming it

Aus book: $239m 94% pcp growth
NZ book: $370m 2% pcp growth
Total book: $627m 29% pcp growth


Aussie is a super star. 29% qrt on qrt growth. Record quarterly growth.
Q3 growth higher than Q2 (christmas quarter) which is usually its largest. The numbers are quite incredible.

90 day arrears 0.46%

Boom!! Expected market reaction - MEH. When will the tipping point occur in sentiment I wonder? I keep quietly accumulating on the ASX as its always substantially discounted to the NZX.

How much impact is the lack of liquidity affecting the SP i wonder.

[Rawz]

Boom!! Expected market reaction - MEH. When will the tipping point occur in sentiment I wonder? I keep quietly accumulating on the ASX as its always substantially discounted to the NZX

Who knows ay,. ive given up on the SP and just going to enjoy the company growth. The SP can do whatever it wants to do lol.

Aussie book is growing exponentially over the last 4 quarters:

Q4 FY21: 10% qrt on qrt growth
Q1 FY22: 15% qrt on qrt growth
Q2 FY22: 19% qrt on qrt growth
Q3 FY22: 29% qrt on qrt growth

The traction is incredible. The Aussie book at $239m is a fraction of total addressable market of $137b (australian personal lending market- covers all personal credit excluding housing mortgages)

[winner69]

The thing that puzzles me is that if Revenue is $92m FY22 they will have only grown at 3% pa over the last two years ($87m to $92m) ....in spite of all the huge big numbers and talk of exponential this and that

I now this time is different and we should be forward looking blah blah b=....so I hope past performance is not indicative of future performance

[Rawz]

W69 might be better to look at net lending margin which will be up 64% in the same period

$30m to $50m

[Muse]

The thing that puzzles me is that if Revenue is $92m FY22 they will have only grown at 3% pa over the last two years ($87m to $92m) ....in spite of all the huge big numbers and talk of exponential this and that

I now this time is different and we should be forward looking blah blah b=....so I hope past performance is not indicative of future performance

That's the topline financial impact from lower than historical interest rates (I suppose thats why bank investors like rising interest rates), and also the change in mix of customers being leant to.

For instance 1H FY22 vs 1H FY21 only saw interest income rise from $41.5m to $42.6m (3%). NIM on the other hand rose by $8.3m (32%) and net lending margin (ie after incurred credit losses) rose by 41% year on year.

Interest income as % of average book was 13% annualised. That's way down on the ~17% plus they were lending at only a few years ago. That's from the rates that fell but more importantly the roll off of the peer to peer lending which was structurally more risky and leant at higher interest rates to reflect the higher incurred credit losses associated with them

[Ggcc]

If things are progressing better than expected and it looks so wonderful. Why are HGH not buying more shares if this share is perceived undervalued?