Reasons Behind The Significant Surge In Plenti Groups Share Price

Key Highlights:

• The automotive loan portfolio achieved a significant milestone, surpassing the AU$1 billion mark.
• Plenti reported quarterly revenue of AU$46 million, representing a substantial 51% growth compared to the PCP.
• The loan portfolio rose to AU$1.90 billion, up 32% from PCP and 8% from the previous quarter.

Source: Kapitales Research

Plenti Group Limited (ASX: PLT) has provided a trading update for the quarter ended June 30, 2023 (1Q24). The key revenue driver, Plenti's loan portfolio, witnessed significant growth, reaching AU$1.90 billion as of June 30, 2023. This represents a 32% increase compared to June 30, 2022 (AU$1.44 billion) and an 8% increase compared to March 31, 2023 (AU$1.77 billion). Notably, the automotive loan book surpassed the milestone of AU$1 billion in April 2023.

Loan originations for the quarter totaled AU$332 million, marking a 15% increase from the prior comparable period (PCP) and a 20% increase from the previous quarter. Automotive loan originations were particularly strong at AU$174 million, demonstrating the growing adoption of Plenti's commercial loan offering and benefiting from a seasonally robust June. Renewable energy loan originations reached AU$36 million, slightly surpassing the previous quarter and reflecting a significant 53% increase from the PCP. Personal loan originations amounted to AU$122 million, showing an 8% increase from the prior quarter, driven by the continued growth in Plenti's direct-to-consumer lending.

Plenti reported annualized net losses of 117 basis points for the quarter, reflecting the industry's overall increasing loss rates and highlighting the relative credit strength of Plenti's loan portfolio. 90+ day arrears stood at 49 basis points at the end of the quarter, rising from 42 basis points at the end of the previous quarter. The early-stage arrears remained relatively stable due to Plenti's continuous refinement of credit risk management.

In June 2023, Plenti successfully completed an AU$406 million automotive loan asset-backed securities (ABS) transaction, bringing its total ABS issuance to over AU$1.7 billion. This transaction not only refreshed capacity in its automotive warehouse facilities but also attracted strong demand from domestic and international investors, reflecting the credit strength of Plenti's underlying receivables.

Overall, Plenti achieved a record quarterly revenue of AU$46 million, marking a significant 51% increase compared to the prior comparable period (PCP).

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