Digital lender Plenti says it expects to start turning a profit by the middle of next year as it continues to make inroads into the personal and auto loan portfolios of major banks.
After floating in September last year, Plenti released annual results on Tuesday that showed it was growing rapidly in the auto loan market, an area it is targeting alongside personal loans and renewable energy loans. .
New loans jumped 64% year-on-year to $470 million, while auto loans rose 301% to $230.8 million – an increase the company attributed to its investments in technology , the use of brokers and enhancements to its lending products.
Plenti posted a $15 million loss for the year, but chief executive Daniel Foggo said he expects to start making a monthly net profit after tax (NPAT) by June next year, as it grows. He said the company’s loan portfolio of $615 million was on track to reach $1 billion by March next year.
“We saw very strong demand in the first quarter. We have seen a continuation of this strong demand so far and we see very promising prospects for the future,” Mr. Foggo said.
“We plan to be the first fintech consumer lender in Australia to reach a billion dollar loan portfolio.”
Shares of Plenti, which fell sharply on their debut last September, continued to trade below their initial offering price of $1.66. The stock rose 0.4% to $1.22 in Tuesday afternoon trade.
Bell Potter analyst Damien Williamson said the result showed strong loan growth and the company was also benefiting from “tailwinds” in credit markets which had lowered its funding costs.
“It’s a pretty solid outlook for the group, given that their loan portfolio has grown very strongly,” said Mr Williamson, who had a “buy” rating on the stock in his latest published research.