Latitude Tells Investors a Big Increase in Net Profit, Shares Up (ASX:LFS)

Despite its turbulent start to trading, Latitude Group Holdings Ltd [ASX:LFS] share price is on the up. Capping off a week of gains with a further 3.27% rise today, at the time of writing.

The improved sentiment comes on the back of an interesting update today. With Latitude’s own management deciding to release an updated estimate of its cash profit for the six months to 30 June.

A decision that they have made ‘due to the limited equity research coverage at this time.’

So, let’s take a look shall we…

70–80% NPAT increase and dividend commitment

The big news that investors will be pleased about is Latitude’s bumper net profit guidance. Forecast to be in the range of $115–120 million.

A result that represents a 70–80% improvement on the previous corresponding period (pcp).

Furthermore, Latitude has confirmed that it intends to pay a 7.85-cent per share unfranked dividend. Their first shareholder dividend since listing. And what will now be the benchmark for future yields, no doubt.

All in all, it’s a good result for the company. Especially after finally making it onto the ASX after years of trying. You can read all about their IPO woes in our previous coverage here.

Because as CEO Ahmed Fahour comments, as optimism returns to the wider economy, Latitude should stand to benefit:

Volumes have recovered strongly in all areas other than travel and current indications are that this trend will continue for the remainder of 2021. Instalments volumes have been pleasing, particularly in the home segment, and we see this performance continuing.

Personal Loans and Auto Loans volumes are growing strongly and Latitude is now the number two originator of new Personal Loans in Australia and one of the leaders in New Zealand. We remain optimistic that travel volumes will recover quickly when borders reopen, although the reopening has been further delayed.

What’s next for Latitude Share Price?

Looking ahead, Latitude is still focused on its developing BNPL product: LatitudePay+. With a full launch slated for the second half of the year.

Beyond that, management is also pursuing licences in Singapore and Malaysia to launch LatitudePay+ into these markets as well. Working in tandem with several ‘key merchant partners’.

So, shareholders certainly still have a lot to look forward to. Even beyond the upbeat net profit estimates and dividend.

All of which should help dig the LFS share price out of its recent downtrend.

But Latitude certainly isn’t the only fintech winning over investors lately. We’ve found three promising ASX-listed stocks that are primed for fintech success. You can learn all about them in our latest free report.

Because if Latitude’s performance is any indication, the financial services sector may be beginning to flow once more.

Regards,

Ryan Clarkson-Ledward,
For Money Morning

PS: The Next Afterpay? Discover three promising Aussie fintechs that are currently trading below $1. Click here to learn more.


Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks by dissecting the latest events affecting the world.

To find out more about the publications Ryan works on and how you can subscribe, please click on the corresponding link here:


Money Morning Australia