Transcription of Finance News Network Interview with Money3 Corporation Limited (ASX:MNY) Managing Director, Robert Bryant
John Treadgold: Money3 Corporation Limited (ASX:MNY) is a financial services company that offers small cash loans, as well as secured and unsecured loans and car finance. I’m John Treadgold and joining me today at the ASX Investor Series is the Company’s Managing Director, Robert Bryant. Robert welcome to FNN.
Robert Bryant: Thanks John, nice to be here.
John Treadgold: Your half year results have shown strong profit growth. What’s behind the gains?
Robert Bryant: Our profit growth was 114 per cent on the period prior. The cash store branches hit profitability, whereas we had only just taken them over the year before. We’ve got access to debt funding, which has really grown our loan book in the secured area. And so distribution, debt funding and good products, sustainable products, must lead to profit.
John Treadgold: You focus on borrowers who can’t access funding from traditional sources. How does your business model diverge from those of traditional lenders?
Robert Bryant: It takes a lot of time to deal with people who have had challenges in the past with their credit, and we take the time to understand customers’ needs.
John Treadgold: You bought a number of brands that relate closely to Money3’s core business. How have their customer databases and systems integrated?
Robert Bryant: That’s a great question. The Cash Train that we acquired the business in December 2014, has all employed customers which will be great to refer loans to our secured business. The year before we acquired the cash store and that gave us a big footprint across Australia, again to provide unsecured loans, also referrals to our secured division.
John Treadgold: Bad debts were 14.4 per cent of revenue for the first half. How does Money3 manage its debtors?
Robert Bryant: We express our bad debt as an expense item so it looks high. However, it’s right on. When we’re growing our business with new customers, we expect to be up around the top range of 15/15.5 per cent as an expense. It’s just under that, we expect it to stay similar for about six to 12 months while we’re in the expansion phase.
John Treadgold: From a demand perspective, how do you see the future of second tier lending in Australia, and what strategies do you have to grow your customer base?
Robert Bryant: There’re four to five million Australians, who are said to have a default on their credit according to Veda, and I don’t doubt that. There’re also 3.9 million Australians who’ve got less than a week’s savings in their account, and I’m not surprised about that. The demand is there, it’s a matter of giving them credible sustainable options and getting that message out. And we’re becoming fairly strong in that area.
John Treadgold: Finally what should investors who are interested in Money3 focus on for the next 12 months?
Robert Bryant: We have very high priority for the next 12 months in making our systems simpler, quicker. We’ve got access to debt funding, we’ve got a great distribution network and I think excellent results will continue to come.
John Treadgold: Robert, thank you for joining us on FNN.
Robert Bryant: It was an absolute pleasure.