Harmoney gains significant momentum, announces new Chairman
The future is consumer-direct.
Sydney / Auckland , 31 August 2021
ASX / NZX release
HARMONEY GAINS SIGNIFICANT MOMENTUM IN AUSTRALIA, ANNOUNCES NEW CHAIRMAN
THE FUTURE IS CONSUMER-DIRECT.
RESULTS: Resilient As Growth Bounces Back
Harmoney Corp Limited (ASX/NZX: HMY) (‘Harmoney’ or ‘the Company’), Australia and New Zealand’s largest online consumer-direct personal lender, is pleased to release its results for the 12 months ended 30 June 2021 (FY21). Harmoney reported resilient results despite COVID-19 impacts for FY21, with record period end receivables book at NZ$501 million and continued improvements across new loan originations, net lending margin and stable group arrears.
Following the introduction of Stellare’s™ Libra 1.7 in Australia, new customer originations were up 260% half on half demonstrating the strength of the platform to identify credit worthy customers though Harmoney’s consumer-direct data. This tech-based quality account acquisition has been further demonstrated with stability in the 90+ days group arrears to 0.69% and continued improvements in net lending margin of 6.8% and net interest margin of 10.6%.
Commenting on the Company’s FY21 results, Harmoney CEO and Managing Director David Stevens said: “During FY21, we successfully listed on the ASX and NZX, launched Libra 1.7 in Australia and Libra 1.8 in New Zealand, grew our loan book to over NZ$500 million and continued to deliver a quality end product to our customers.
“Overall, FY21 was a tale of two halves, with a significant recovery in originations in the second half from the impacts of COVID-19. This recovery is expected to drive a strong uplift in revenue and receivables growth in FY22. In addition, we are now well-positioned with close to 700,000 direct consumer accounts representing a 51% cumulative annual growth rate over the past six years. As Australia and New Zealand’s largest 100% consumer-direct personal lending platform, we have just begun to see the results of the investments and benefits of our approach to consumer lending. With the ability to access rich insights through our data we are able to offer our customers tailored solutions to meet their needs while reducing lending risk and delivering strong results for our shareholders.”
Momentum grows post-Covid.
FINANCIAL & OPERATIONAL : H2 Accelerates Following Tech and Marketing Investment
Harmoney achieved, when rounded, break-even pro forma cash net profit after tax for the year. While pro forma total income was down in the year to $79m, on a lower average loan book due to the impacts of Covid-19 in H2-FY20 and H1-FY21, this was more than offset by lower funding costs and credit losses as net lending margin increased by 9% to $33m.
Marketing costs, which are fully expensed as incurred, increased to $16.5m driven by Harmoney’s rapid post IPO scale up in the Australian market, with these costs remaining steady as a percentage of originations. Personnel costs also increased post IPO as Harmoney expanded its development capability in relation to its proprietary Stellare™ platform.
|Total Income (NZ$m)||79.1||86.0||(8%)|
|Cash NPAT (NZ$m)||(0.4)||2.8||n/a|
|Net interest margin||10.6||10.6||0 bps|
|Net lending margin||6.8||5.8||100 bps|
Our direct model and proprietary technology work together to create real cost efficiencies (Fixed opex/Rev: FY21: 22%). Thanks to Stellare’s™ end-to-end automation of the loan application and approvals process, revenue can grow rapidly without needing to increase staff or operating expenses as more traditional lenders do. This creates highly scalable growth opportunities for Harmoney. Additionally, Stellare’s™ straight through processing provides further benefits, with the ability to temporarily moderate the automated settings to take into consideration macro conditions.
Harmoney’s transition to warehouse funding remains on track with 61% of the book warehouse funded at 30 June 2021, undrawn committed warehouse funding lines of NZ$205 million.
BOARD: Paul Lahiff takes over as Chair.
Harmoney advises Paul Lahiff will be stepping into the role of Chairman of the Board of Harmoney following the decision by David Flacks to step down as Chair. David has been instrumental in assisting management in guiding the direction and strategy of the Company from its early days as a peer-to-peer lending start-up to the recent listing on the ASX and NZX. David helped establish Harmoney as one of Australasia’s leading personal lenders and, following the appointment of Paul Lahiff to the Board earlier this year, felt that it was an appropriate time to transition from the role of Chair and the Board appoint Paul as his replacement. Paul has significant governance experience in the Australian financial services sector and has the requisite skills to guide management as they grow the business.
David Flacks will step down from the role as Chair effective today but will remain as an Independent Director while a suitable replacement is identified to ensure a smooth transition and continuity of Board oversight.
OUTLOOK: Scaling for Growth.
Harmoney’s unique consumer-direct lending model provides a scalable platform for growth. The Company is forecasting for FY22:
- Growth of at least 20% in the Group loan book;
- Group pro-forma revenue growth of at least 16%;
- Net lending margin to increase by at least 0.2%;
- Fixed operating expenditure-to-pro-forma revenue ratio to decrease by ~2%; and
- Transition to warehouse funding to be ~90% complete by June 2022.
Growth is forecast to be predominantly driven by Libra™ 1.7 in Australia (released in February 2021) and Libra™ 1.8 in New Zealand (released in June 2021) alongside 3Rs™ customer originations growth off the back of higher Australian and New Zealand new customer originations.
Commenting on the outlook, CEO & Managing Director David Stevens said:
“We value the support of our employees, shareholders and customers over this transformational and challenging year. Harmoney is positioned to execute on a clear strategy of growing high margin receivables across Australia and New Zealand, where the total addressable market continues to expand as traditional financiers are contracting and more customers are going online for their financial services. In FY22, this strategy will lead to additional revenue for the Group and add to our existing scale as we further grow our Australian and New Zealand businesses.”
Investor Webinar at 9:30am AEST / 11:30am NZST today
CEO and Managing Director, David Stevens, and CFO, Simon Ward will host an investor conference call and webcast including a Q&A Session today at 9:30am AEST / 11:30am NZST.
Participants are encouraged to register before the start of the call using:
Registered participants will receive their dial in number upon registration.
This release was authorised by the Board of Harmoney Corp Limited.