How Money3 Corporation Limited (ASX:MNY) Raised Final Dividend By 26%
Headquartered in Bundoora, Money3 Corporation Limited (ASX:MNY), which provides personal loans to individuals with limited access to traditional lenders, saw a 37% increase in gross loan book to $273 million in FY’17. Gross loan book growth is a key indicator of future revenue growth for a credit provider such as MNY. In addition to a 13% jump in revenue to $110 million, core earnings (EBITDA) margin also improved to 46.1% from 36.5% a year ago. On a per share basis and without accounting for dilution, net earnings grew nearly a third to 18.81 cents, triggering a dividend hike of 26% in the final payout and nearly 8% for the full-year. MNY is a high-yielder with an almost 4% in dividend payout. MNY said demand for secured automobile loans, the less riskier part of its portfolio, continued rising. At 21% higher than in the last fiscal, secured automotive lending accounted for more than half of MNY’s overall revenue, while the loan book of the same jumped by 41% to $214 million. Money3 is growing fast with a significant projected earnings growth over the next three years. But the stock has shed nearly 10% value so far this year as revenue growth moderated in the first-half of the fiscal year ended June’17. This correction, though, is a part of its 260% gains over the past five years, along with solid dividend payouts, for the long-term investors. XYZ appears fairly valued when accounting for its small-size and volatility, but may trade at a significant premium if it keeps growing with this momentum. MNY accounted for nearly 2% of the addressable used-car market in Australia, and says the scope to grow its market share is significant — through “existing broker relationships established around the country”. It sells through three channels: broker, branch and online. The company completed the integration of online platform and closed 13 branches during FY’17.