Prospa hits record full-year earnings
Prospa have announced a trading update for the quarter ended 30 June 2022 (4QFY22), with another set of record-breaking results across all key metrics as small business customers invest in recovery and growth.
Prospa observed significantly higher demand for funds from small businesses across Australia and New Zealand. The momentum enabled the company to achieve its highest ever month of $104.6 million for originations in June 2022. This has led Prospa to achieve the highest ever quarter for originations of $245.7 million over 4QFY22, an increase of 35% on pcp (4QFY21: $182.5 million).
The New Zealand business contributed originations of $39.8 million over the period after successfully scaling the new Line of Credit product into the region, with full launch of the product on 4 July 2022.
In line with originations growth, the Closing Loan Book increased to $701.3 million, up 20% from the prior quarter (3QFY22: $583.6 million) and up 64% against pcp (4QFY21: $427.1 million). Average Gross Loans reached $633.4 million for the quarter, an increase of 16% from the prior quarter (3QFY22: $546.6 million). Total revenue increased to $53.9 million for the period, with yield holding steady at 34% for the period (4QFY21: 34%).
Prospa’s continued focus on technology through digital and real-time enhancements has further improved the credit assessment process and the customer journey. These investments have enabled the company to achieve EBITDA of circa $12 million over FY22 while remaining within the Board mandated loss rate range of 4-6%. Additionally, total active customers increased to ~16,100, up ~2,100 from March 2022, while maintaining an industry-leading Net Promoter Score above 80.
Greg Moshal, Co-Founder and Chief Executive Officer, said, “We are incredibly pleased with the momentum and outcomes the team has achieved. Each quarter this year, they’ve come back with greater enthusiasm. Their hard work has translated to record-breaking results, including the $104.6 million originations in June.
“Our partners have played an integral role in the achievement of Prospa’s results, placing trust in our products and advocating them to their small business clients. It gives us great satisfaction to know that our funding solutions are supporting small business owners to achieve their business goals. The success stories reaffirm our commitment to keep small business moving, and keep us focused on closing the funding gap for small businesses as a strategic priority.”
Ross Aucutt, Chief Financial Officer, added, “The investments in our technological capabilities and credit decision engine have supported our strong results. We are financially well positioned to support the ever-increasing demand for funds, with continued investment in scaling our funding products, executing prudent decision-making for our growth prospects despite uncertain macro-economic conditions across Australia and New Zealand.”
Share Buy-Back
On 16 February 2022, Prospa announced an on-market share buy-back programme of up to 10% of PGL’s issued share capital over 12 months. The Group’s ongoing strong performance led to the Board’s decision to return capital to shareholders.
Prospa has repurchased 690,876 ordinary shares up to 30 June 2022. It is intended to recommence the programme following the release of full-year results, and it will continue to be funded by Prospa’s existing level of unrestricted cash.
