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Plenti Group Ltd reported a strong first quarter for fiscal year 2025, with significant growth in loan originations and a substantial increase in its total loan book. Trading at an attractive P/E ratio of 6.64 and maintaining a GOOD financial health score according to InvestingPro, the company’s strategic initiatives and partnerships have spurred investor interest, reflected in a 2.76% increase in stock price, closing at $0.93. InvestingPro analysis reveals 8 additional key insights about Plenti’s financial position and growth prospects.
Key Takeaways
- Loan originations surged by 44% year-on-year, reaching $437 million.
- Total loan book expanded to $2.68 billion, a 282% increase from the previous year.
- A successful $400 million asset-backed securities issuance bolstered funding.
- Strategic partnership with NAB contributed to double-digit million monthly originations.
- Stock price rose by 2.76% following the earnings release.
Company Performance
Plenti Group demonstrated robust performance in Q1 FY2025, with loan originations increasing across all verticals. The automotive segment led with a 50% rise in originations, followed by personal loans at 48%, and renewables at 13%. The company’s total loan book reached $2.68 billion, reflecting a significant year-on-year growth of 282%. This performance underscores Plenti’s strategic positioning in expanding markets and its ability to capitalize on growth opportunities.
Financial Highlights
- Loan originations: $437 million (44% increase year-on-year)
- Total loan book: $2.68 billion (282% increase year-on-year)
- Automotive loan originations: $229 million (50% increase)
- Renewables loan originations: $49 million (13% increase)
- Personal loans: $160 million (48% increase)
- Annualized loss rates: 94 basis points (down 28% year-on-year)
Market Reaction
Following the earnings call, Plenti’s stock price increased by 2.76%, closing at $0.93. This positive market reaction reflects investor confidence in the company’s strategic initiatives and growth trajectory. The stock has demonstrated impressive momentum with a 24.83% return over the past six months. According to InvestingPro’s Fair Value analysis, the stock appears to be trading near its fair value, suggesting balanced market pricing. The stock’s movement is notable given its position within the 52-week range of $0.64 to $1.00, indicating a strong performance relative to broader market trends.
Outlook & Guidance
Plenti has set a clear target to grow its loan book to $3 billion by March 2026. With a robust current ratio of 51.67, the company maintains strong liquidity to support its expansion plans. The company plans to expand its partnership with NAB and focus on scaling its renewables business, particularly in Western Australia. InvestingPro’s comprehensive analysis, available through its Pro Research Report, provides detailed insights into Plenti’s growth strategy and financial stability. These initiatives are expected to drive future growth and enhance operational efficiency.
Executive Commentary
CEO Adam Bennett highlighted the company’s market share in key verticals, stating, "We’re only 2% of the market in auto, 24% in renewables, and 4% in personal loans." CFO Miles Drury emphasized the importance of the NAB partnership, noting, "Our objective is particularly to grow all the business, but we do particularly want to see that NAB momentum coming through."
Risks and Challenges
- Market Competition: Increasing competition in the financial services sector could pressure margins.
- Economic Conditions: Macroeconomic factors might impact loan demand and credit performance.
- Regulatory Changes: Potential changes in financial regulations could affect operations.
- Technological Investments: The need for continuous investment in technology to maintain competitive advantage.
- Credit Risk: Despite low current loss rates, maintaining these levels poses a challenge as the loan book expands.
Q&A
During the earnings call, analysts inquired about the low credit loss rates and the seasonality of originations. Executives elaborated on their investments in renewables and underwriting capacity, underscoring the company’s commitment to sustainable growth and operational efficiency.
Full transcript - Plenti Group Ltd (PLT) Q1 2026:
Tom, Moderator: Today’s presenters are Adam Bennett, chief executive officer, and Miles Drury, chief financial officer. The update will be followed by a question and answer session. If you’re an analyst and you wish to be added to the question queue, please press the raise hand button visible at the bottom of your screen. For all other investors who would like to ask a question, please press the q and a button at the bottom of your screen and type in your question. I will now hand over to Adam Bennett, Chief Executive Officer of Plenty.
Please go ahead, Adam.
Adam Bennett, Chief Executive Officer, Plenty: Thanks, Tom. And I’m here with Miles, Miles Drury, our CFO. So, hello, and thanks for joining the call. I’m delighted to once again be sharing an outstanding set of results for Plenty for the first quarter ended thirty June twenty twenty five. And I know most of you know who we are, but for those who may be on the call and don’t know who we are, just maybe a very quick recap.
So Plenty is one of Australia’s fastest growing fintechs. We deliver market leading customer propositions across automotive, renewables and personal loans, and we really use our proprietary technology platform to deliver very fast, easy and consistent customer journeys. We only lend to prime borrowers. We’ve got a very strong funding platform and we’re very focused on the creation of shareholder value. So the quarter just passed.
So the entire Plenty team across all aspects of our business has extremely hard on all fronts to deliver great results for our customers, our strategic partners and brokers, and for you, our shareholders and investors. And pleasingly, we’ve been able to build and maintain the momentum that we created through quarters three and four last year and really started quarter one with some pleasing outcomes. So we’ll talk you through our results, and we’ll ensure we leave some time for questions for people on the call. So let’s just jump straight into it. So we had an outstanding quarter on all of the metrics that matter, especially pleasing with the growing momentum in our loan originations.
So investors may recall we hit an all time record of $383,000,000 in quarter three last year. We then beat that in quarter four with $4.00 $7,000,000 And I’m delighted to share with you that we smashed that out of the park in quarter one and delivered $437,000,000 worth of loan originations, which is up 44% on PCP. This takes our loan book to $2,680,000,000 which is 2821%, sorry, increase on PCP. And all three of our verticals went well during the quarter. So automotive, we went to $229,000,000 of originations, which was up 50% on PCP.
Our renewables business did $49,000,000 which was 13% up on PCP. And our personal loan business did $160,000,000 which was 48% up on PCP. So, really good results. And I’m really pleased with that loan book growth and how we’ve built on that momentum. And it’s a clear signal that when all parts of our company, our business development, our originations and underwriting and credit decisioning and our technology, when all of that works well together, we deliver a really good result for our customers, our brokers and our importantly, our shareholders.
So this growth is the result of a couple of active decisions we’ve made as a result of refreshing our corporate strategy. So number one, we’ve continued to invest in our proprietary technology platform. So this is at the heart of plenty, and we are always continuing to look at how we remove friction, make it faster, easier, simpler for our customers, and also importantly, our brokers. Number two, we’ve invested in more in operations and underwriting staff to make sure we can hit very strict internal SLAs on making sure we can credit decision to work in the deals that’s coming in and give everyone confidence that we will get to the deals when we say we will get to them. Number three is evolution of our business development team.
So we were naturally organized around products previously. So we went to market via PLs or auto. And what we’ve evolved to is now we’ve got a very much a broker centric model where we’re going to market to the brokers and talking to them about PLs and and auto, for example, with the same same teams. And lastly, number four is the power of a very clear target. So we’ve been very clear to make sure all of our staff understand that our target for the year is a $3,000,000,000 loan book by March 2026, and we’ve lined up and aligned every resource in the company around achieving that goal.
Let me share also share some detail on two developments that I’m very excited about to share with you. One is our strategic partnership with NAB. So as we’ve flagged for some time, we spent the first six months really bedding down that that solution. And the first quarter was one where we were thinking that we would see the first meaningful set of origination volumes. And very pleasingly, that’s exactly what we’ve seen.
So obviously, the daily origination run rate growth is growing, but because that’s coming off a very low base, what we look at is the absolute level of originations. And that’s really going well. And you don’t have to be a mass Nobel Prize winner to figure out that we’re sitting in the double digit millions in terms of originations per month now, and we’ll share more when we get to the half. And our focus on NAB for the coming months is really to continue the marketing effort from NAB and really sharpening pricing, and also from our perspective, making sure we’re managing and pulling everything and converting everything through the funnel that we can. And given the size of the customer base of NAB, which is many millions of consumers, we remain very confident and excited about the potential of this product in coming quarters and halves.
Second, I’d like to delighted to share that we won the WA government’s home battery rebate scheme tender. So it was a very highly highly competitive tender, and we won the right to administer that on behalf of the West Australian government. And it’s pretty much in line with our shared strategy of having very diverse and complementary distribution channels to market. We don’t want to have ever have all of our eggs in one basket, and it’s yet another example of how we’ve got a very commercially collaborative culture, and we can work very closely with large third parties to make sure we can deliver very, very good outcomes for them. Now that will give us the program to administer over a 100,000 battery rebates to households over coming years in West Australia and provision around $200,000,000 of interest free lending.
Now as much as winning it was a highlight, one of the things that really stuck out for me was the speed at which we were able to move from when we were announced as the winner. We had six weeks till the July 1 to deliver on the government’s election commitment to then deliver an up and running scheme, that’s and what we’re able to do. So we were able to kind of unify our technology, our operations, and our people and really deliver a great result for the WA government on the 1. Now we have some work to do, obviously, to fine tune that, but it’s there’s not many organizations who’d be able to move at that speed and deliver such a great result. So, that’s something that’s making me very pleased.
Now, you will see limited impacts of this, obviously, on Plenty’s overall loan book in coming quarters, but one of the most important things is the strategic value of this to us in terms of our renewables business and forging even stronger relationships with national solar installation partners and also in WA being able to then sell and cross sell things outside the program around the rest of Australia. So we’re very excited about it, and you’ll see more about that. So let me pause there now, and I’ll pass to Miles to talk to you through our margins, credit performance, our funding for the quarter, and also update you on the progress against our FY 2026 objectives.
Miles Drury, Chief Financial Officer, Plenty: Thanks so much, Adam. And again, I echo Adam’s comments about how pleased we are to deliver these overall results. Look, touching briefly on margins, we disclosed that the full year FY 2025 result, we’ve seen some strong margins in April. This was because the market element of our funding costs had dropped off the back of, obviously, some interesting developments in The US, but that encouraged people to expect some RBA rates to come down. We flagged that this impact had abated through May.
Market funding costs had risen a bit. There had been some competitive repricing. And by June, we were broadly back to sort of a more in line with sort of historic averages, maybe even a little bit lower. June tends to be pretty strong in auto, which has tighter margins. Overall, the quarter saw an uplift in margins versus the prior quarter, which is a good thing to see.
But look, overall, in the blended portfolio, you know, not a huge, huge impact. Moving to credit, I mean, I guess given our low risk position of 43 basis points at the March, you know, you could have expected the quarter to be pretty strong from a credit point of view, and it was at 94 basis points of annualized losses. Having said that, I’d be lying if I said that even I wasn’t surprised by just how strong the credit result was for the quarter. Look, there’s not a huge amount to call out in that sort of beyond, obviously, you know, the underlying high credit quality of the Plenty portfolio and the fact that, you know, of the customers we lend to, I know they’re still in a good credit position. We did have slightly higher than usual collections in the period.
There were a couple of larger loans that came through, which bumped it up and helped a little bit. But, you know, that was probably more of the margin and just the overall strength of credit in the book was really what shone through. Ninety day arrears ended the period up slightly at 49 basis points, although down actually quite a bit from where it was PCP at 59 basis points. So still in really good position on the credit front going the second quarter. In terms of funding, the quarter saw the Plenty Treasury team complete another very successful ABS with a $400,000,000 peel and green issuance.
You know, given the market volatility we saw in April where credit spreads globally pushed out pretty significantly off the back of those US tariff announcements, it was really pleasing to see, you know, how strongly both credit and pricing came back and enabled us to execute a very strong deal, which really is a testament to the strength and investor interest in the Australian structured credit market. I mean, you know, while our, you know, the quality of our credit book should get investors interested and, know, we’ve now got a pretty strong track record, you know, 10 issuances over $3,800,000,000 of ABS completed. Again, I would say and, you know, our treasury team executed that deal very well. I was still surprised again by just how much money there was. And that allowed us to both upsize the deal from the original announce size, and also ultimately deliver margins that were inside that same deal in November 2024, which is a pretty remarkable outcome given everything we’d seen in prior months.
We’ve now got a couple of months to do internal treasury projects before we’re likely to return to the market around the third quarter with our next auto ABS. And then finally, touching on our FY ’twenty six objectives around growth, profitability and efficiency. We set an objective of achieving a $3,000,000,000 loan book by March 2026. And clearly, the origination momentums from the current quarter puts us in a really good place to deliver on that outcome. Equally, strong portfolio growth, low credit losses are very supportive of the objective we’ve set in terms of driving meaningful cash impact growth for the FY ’twenty six year.
And we also remain focused on delivering operating efficiency as we scale to deliver on our efficiency targets. So overall, the ’26 has set the Plenty business up really, really well for the coming financial year. But we remain really focused on delivering on that refresh strategy to grow the business and grow value for our shareholders. And with that, I’ll pass back to the moderator for you.
Adam Bennett, Chief Executive Officer, Plenty: Well, yeah, guess pass back to me. So in closing, I’m extremely pleased with Q1’s performance. So very good momentum on all fronts, on all of the metrics that matter. And, you know, personally, having just clicked over a year in the job yesterday, I’m pleased that, you know, we’ve refreshed the corporate strategy. We’ve got very clear goals across the company and aligned our people, and we’re starting to to see just that increased momentum of a of a really great foundation that’s been built up over many years by the team to continue to deliver a really good set of business outcomes.
So, again, it’s a it’s a great example of when the business operates as designed, you know, when the operations go well, business development goes well, we’re making smart credit decisions, we will continue to scale the business. So I’m delighted with the progress. So, Tom, back to you, and we’re we’re happy to take questions.
Tom, Moderator: Thank you, Adam. So as as mentioned, we will now take questions from participants. As a reminder, if you’re an analyst and you wish to be added to the queue, please press the raise hand button visible at the bottom of your screen. When your position in the queue is reached, you’ll be unmuted, and you can ask your question directly. For all other investors who would like to ask a question, please press the q and a button at the bottom of your screen and type in your question.
Questions will be selected for answering where they are broadly applicable to investors. If your question is not answered during the call, we will follow-up after the conclusion of today’s webinar. I’ll now pause briefly while the question queue is compiled. And our first question comes from James Bisanello. James, go ahead.
James Bisanello, Analyst: Hi, Adam. Hi, Miles. Congratulations on the result. Maybe just a couple for
Adam Bennett, Chief Executive Officer, Plenty: me. James.
James Bisanello, Analyst: Firstly, just around the annualized loss rates, that was down 28% year on year. And I think, Miles, you noted that was obviously a very good result. Just on that, sort of that’s an aggregated number across the book. So just came to dig in a bit further, and perhaps are you seeing any strength in any particular segments, or is it pretty pretty broad in terms of the strength that you’re seeing there across the loss rate coming down? Thank you.
Miles Drury, Chief Financial Officer, Plenty: Thanks, James. Look. I would say it’s been pretty strong across the entire book. Drill into it by segment, look, the one that was probably interestingly the strongest in the period was actually PL and probably drove the greatest part of the benefit. Having said that, you know, all three channels looked pretty good.
But, you know, as I say, you know, there’s I think there’s probably a macro piece there. I think there’s probably also, you know, if I look at some of the detail around some decisions we made, probably going back eighteen, twenty four months in terms of just some small tweaks to our credit policy, and therefore the quality of originations that have come onto the book. And, you know, some of the early indicators of credit stress have generally been trending down, particularly in the pale book over the last eighteen to twenty four months, and I think that’s been beneficial as well. Having said that, you know, I generally talk in the sort of the one to low ones number for the business. And, you know, while 94 basis points is a fantastic number, you know, I still probably think that’s, you know, for for the medium term, I mean, I’m more the type of number I’d be thinking about.
But, yeah, great to see such a strong performance in the in the period.
James Bisanello, Analyst: Absolutely. And then just switching gears to originations as well. Just keen to, pick a bit further in terms of seasonality. So June was a record, and it’s obviously hard to continue to keep doing records. So, I mean, it sounds like we should see some growth in renewables perhaps next quarter, but broadly, how should we think about sort of the run rate and originations for the group moving forward?
Miles Drury, Chief Financial Officer, Plenty: Look. You know, we obviously just try to focus on the results we’ve delivered. Our ambition is obviously to keep growing things. I mean, I think, yeah, renewals is in a good place given some of those programs. Again, we’ve got to work through exactly how much the impact of subsidies to size of loan plays versus volume of loans, but amazing to see the level of top of funnel demand that we’re seeing coming through there.
I mean, automotive, again, was strong in June, given you’ve got that end of year impact. Having said that, our objective is particularly to grow all the business, but we do particularly want to see that NAV momentum coming through, which was a contributor to the growth that we saw. And then on personal lending, again, you you can see that move around a little bit. But, you know, we want to keep on doing what we can to drive growth in that channel, but maybe a little bit more challenging to keep pushing those numbers up in the same way as the other channels.
Adam Bennett, Chief Executive Officer, Plenty: Yeah. And on the renewables too, we did see some, you know, applications pausing ahead of the July 1 where customers and installers were pausing to make sure they could take advantage of the various federal and state government rebates that are in market now. So we think some of that will forward. James, the other answer to your question is, we’re very pleased with momentum and the growth that we’re putting on, but let’s not forget, we have very, very small shares of very, very large markets. And so in auto, we’re only 2% of the market.
In renewables, we’re about 24%, and in PLs, we’re about 4%. So certainly, my view is we need to continue to to to drive the business forward with a with a confidence and enthusiasm that we can continue to build meaningful numbers in in those large markets. So that is the task ahead of us, and that’s what we’re we’re kind of gearing up to make sure we can get at.
James Bisanello, Analyst: Great. That all makes sense. Thanks for taking my question, guys. Cheers.
Adam Bennett, Chief Executive Officer, Plenty: Thanks, James. Thanks, James.
Tom, Moderator: Our next question comes from Lachlan Woods. Go ahead, Lachlan.
Lachlan Woods, Analyst: Hi, Miles. Adam. Thanks for taking
Miles Drury, Chief Financial Officer, Plenty: my question. Good
Lachlan Woods, Analyst: the first one, just on renewables. Just is there any investments given the opportunity there that you guys are making? Just like to kind of front run it in terms of, like, marketing or additional, I guess, stock to get more market share in terms of brokers?
Adam Bennett, Chief Executive Officer, Plenty: Yeah. Maybe I’ll I’ll answer that, and and then Miles can jump in as well. I mean, the renewables business is one that we’ve we’re we’re in the process of refreshing. So we’ve just appointed a new head of renewables, which is fantastic. So they they joined about a month ago.
So they’re still in their first ninety days really taking a look at the performance of that part of our business, which is good. It’s going well. But, obviously, we are of the mind. We always reserve the right to get smarter and be better. And so that is the expectation that we will continue to look at ways that we can continue to improve our offer in the market, improve, you know, the number of brokers that we we serve, and make sure that we’re always really relevant.
The other thing is we want also wanna make sure we seek ways to really leverage GreenConnect, which is our proprietary platform for helping customers set up virtual power plants. So that’s something that connects, you know, the likes of AGL, with the equipment providers, with the customers and installers, and our us as the financier. And so we’ve got a very unique platform there that we wanna make sure we’re getting maximum juice out of.
Miles Drury, Chief Financial Officer, Plenty: Maybe the only additional make to that was the reason we appointed a new head of renewable was not because the old head of renewable left. It was No. At all. It’s because they’ve done a great job of building that business. And as we structured our our our auto sales team and increased our focus on commercial, given how successful they’ve been in building renewable, we’d move them into folks on that channel.
And but, you know, obviously, new new new leadership brings new new new views and new perspectives. Yeah.
Adam Bennett, Chief Executive Officer, Plenty: And Full marks for 14 halves of Yeah.
James Bisanello, Analyst: Exactly. Yeah.
Miles Drury, Chief Financial Officer, Plenty: Seven years of continuous growth. They’ve they do that in in the auto commercial place we’ll be pretty happy. I mean, I’d also say, I mean, that the WA program, are making investments to support that. And obviously, by running that program, anyone who does business in WA has to deal with plenty because we are the program administrator. And that’s something that we want to be driving to continue to build those relationships and both capture additional volume in w WA, but also nationally.
So, yes, there is I mean, there is effective investment occurring by virtue of of winning that WA program.
Lachlan Woods, Analyst: Perfect. And then the second one, I I mean, you previously mentioned that you kinda have, like, 30% capacity in the underwriting team. Is that still the case? Or is it expect like an expectation you might need a bit more investment in that?
Adam Bennett, Chief Executive Officer, Plenty: I think we said we had 30% capacity. What I did say is that we are we’ve invested in our underwriting team to make sure we have always got capacity to do the business deals we’re generating. So that’s really on our mind. So we certainly don’t wanna get 30% ahead of the market in what we’re doing. We’d like to be a little bit ahead of the market in terms of so we never kind of, you know, missing our SLAs to brokers and customers.
But, you know, we’ll continue to finally and fine tune the capacity we need of underwriters. And we’re also using techniques like straight through processing to augment the human effort because we’ve we’ve also pushed very strongly into straight through processing to make sure that we can continue to deliver really good outcomes in that space efficiently and effectively.
Lachlan Woods, Analyst: Perfect. That’s all from me. Thank you.
Miles Drury, Chief Financial Officer, Plenty: Thanks, Lachlan.
Tom, Moderator: Thank you, Lachlan. I’ll pause briefly for any, final questions. If you would like to be added to the queue, please press the raise hand button or the q and a button at the bottom of your screen. As there are no further questions, we’ll now conclude the webinar. Thank you all for joining Plenty Group Limited’s first quarter FY twenty six results update.
Have a good morning. Thank you very much. Thank you all.
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