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MONEYME's record H1 revenue could buoy share price

BNPL company MONEYME has delivered record revenues for the first half of FY23, despite a challenging period for the sector and calls for heightened regulation.

Source: Bloomberg

ASX-listed fintech company MONEYME delivered record revenue in the first half of FY23, which could help to buoy its share price despite concerns about the Australian buy-now-pay-later (BNPL) sector in the wake of Openpay's collapse.

MONEYME is also confident that it is well-positioned to weather stricter regulation of the BNPL sector that is currently under consideration by Australian regulators.

MONEYME's H1 FY23 revenue hits record high

According to its latest results, MONEYME saw revenue and statutory profit rise to record highs in H1 FY23.

Gross revenue leapt 152% in year-on-year terms to hit $121 million, with MONEYME highlighting the role of 'strong organic and acquired growth, and risk-adjusted customer pricing.'

The company pointed to a sizeable pipeline of contracted revenue in future, which stood at $395 million as of 31 December 2022.

MONEYME's profits also posted robust growth to hit an unprecedented high. Statutory NPAT increased 147% compared to the same period the year previously, to hit a record $9 million.

MONEYME managed to achieve this growth while also buoying its credit health. Its average Equifax credit score saw a rise of 6% to 714, for a ranking of 'good.'

The company has indicated that it will now moderate its strategy to focus on credit risk management amidst conditions of macroeconomic uncertainty and a hawkish monetary policy environment.

'At the start of the financial year, we announced our intention to moderate growth to prioritise building profit and lowering our credit risk,' said CEO, Clayton Howes.

'I am pleased now to say that our shift from high growth to profit delivery has been swift and disciplined, achieved through proactive cost optimisation, prudent credit risk management, and customer pricing adjustments to preserve risk-adjusted returns.'

MONEYME backs calls for stronger regulation

BNPL has been one of the leading sub-sectors for Australian fintech, with the ASX host to a range of highly popular platforms including Zip, Afterpay and Klarna.

As a BNPL platform, MONEYME bills itself as a 'leading disruptor and innovator in the consumer lending market,' making use of AI and cloud-based technology to facilitate the rapid assessment of loans and provide funds to consumers immediately following approval.

The Australian BNPL sector has taken a hit of late, however, from a hawkish monetary policy environment that is driving up interest rates across the board, as well as concerns over a lack of regulation and consumer protections.

These concerns have become especially acute following the collapse of BNPL platform OpenPay, which entered receivership at the start of February.

Challenges in the BNPL market have prompted increasing calls for stricter regulation, leading to further trepidation over the potential impact on the share prices of companies in the sector.

MONEYME has expressed confidence in its ability to weather greater regulatory scrutiny, however, with CEO and managing director Clayton Howes previously voicing his support for stronger measures.

'[Regulation] has got to create a fair approach for lenders and customers and for me, being fair we need to have the reporting standard so that we don't have blind spots,' Howes said to The Australian.

'Accurate and extensive credit reporting allows lenders to be more accurate in our credit decision and, in turn, helps to protect consumers.'

In line with these sentiments, MONEYME released a new app-based Credit Score product in the first half, which attracted over 37,000 during its trial operation phase.

'The launch of our app-based credit score product will help us build stronger relationships with our customers and capture new business opportunities,' Howes said.

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