The Plenti Group Ltd (ASX: PLT) share price is zooming up over 12% after giving a first quarter FY22 trading update.
Plenti is a provider of automotive, renewable energy and personal loans using proprietary technology.
Plenti trading update
The company said that it had a record quarter of loan originations of $216.4 million, which is 260% above the prior corresponding period (PCP) and 26% growth quarter on quarter.
Loan originations also had a record month in June of $83.4 million which is a $1 billion annual run-rate.
Loan growth
Plenti’s loan portfolio increased to $757 million which is a 96% increase on the PCP and 23% quarter on quarter growth.
The company said that its prime loan portfolio continued to “demonstrate a strong credit performance” and that annualised credit losses were below 75 basis points (0.75%), with 90+ day arrears remaining low at 35 basis points (0.35%).
Management said that it “successfully” launched its commercial automotive loan offering in mid-May with selected referral partners. The company said that this will approximately double its addressable market in automotive finance.
Plenti said that its strong loan origination growth was achieved without compromising credit quality. Its weighted average new borrower Equifax credit score during the quarter was 835, which is above the 821 figure for the end of Q4 FY21.
Automotive warehouse
Plenti’s automotive warehouse facility increased by $100 million to $450 million.
The company said that the automotive warehouse equity requirement “materially” reduced which releases funds to support ongoing growth.
Management said that it is making progress towards undertaking its first capital markets asset-backed securitisation of loans from its automotive loan warehouse facility in Q2 FY22. It expects this to be a $300 million transaction.
Renewable energy
The company’s renewable energy and personal loan warehouse facility increased by $100 million to $200 million.
Plenti said that renewable energy finance growth was driven by continued adoption by referral partners of its ‘buy now pay later’ offering, as well as adding around 50 ‘introducer partnerships’ during the quarter.
Summary thoughts on Plenti and the share price
From this update it seems as though the business is doing well and continuing to grow, although I don’t closely follow this business. Shareholders appear to be happy with this update as the Plenti share price is up more than 12% at the time of writing.
I’m happy for other investors to take the lead on this one, I have my eye on other ASX growth shares.
