The Fintech lending company Plenti Group Ltd [ASX:PLT] is on the rise today. With its shares up by 13.85% at the time of writing.
A strong surge on the back of a trading update from management, highlighting a fantastic quarter of growth across almost every key metric.
Let’s take a closer look at the details…
Another back-to-back win for Plenti
As Plenti notes, their most recent quarter (April–June) was another record-breaking result. Backing up five consecutive quarters of growth in their loan portfolio.
Loan originations for the quarter stood at $216.4 million. Up 260% from this time last year, and up 26% compared to the previous quarter.
More impressively, the month of June saw Plenti reach a $1 billion annual run-rate. A huge milestone for the company and its ongoing efforts to become a formidable name in lending.
As for the catalyst behind this growth, it is pretty clear that car loans are key.
Plenti has seen a 345% increase in automotive loans over the past year, and a 41% increase in the past quarter alone. With $114.6 million worth of loans now tied to these automotive needs.
All of which was according to plan, as Plenti comments:
‘Automotive loan origination growth reflected a continued increase in market share, following Plenti’s significant investments in automotive-specific technology and product development, sales and distribution capabilities, and continued focus on innovating and enhancing its automotive loan offering.
‘Growth was supported by the introduction of Plenti’s commercial automotive loan to selected partners from mid-May, with the ramp-up in these originations being consistent with the Company’s expectations.’
On top of this, Plenti is also expanding its capacity for automotive loans. Management announced a $100 million increase — from $350 million to $450 million — of their secured automotive loan warehouse facility.
Giving Plenti more capital to work with for their lending goals. Not to mention a ‘material reduction’ in the amount of equity that they have to contribute as well.
Suffice to say, it is a good result for the company and its shareholders.
What’s next for Plenti Share Price?
Looking ahead, Plenti isn’t done with its growth ambitions just yet.
Their immediate goal now is to reach a $1 billion loan portfolio (currently $757 million) by March 2022. Which would require them to keep pace with their recent quarterly growth.
So momentum will be key for the stock, especially as there are still so many unknowns revolving around interest rates.
Beyond that, though, their second major goal is profitability. A milestone that management is hoping to reach by June 2022. Without impinging on their growth targets, of course.
Whether they’ll be able to achieve these goals remains to be seen.
But right now, the company is certainly headed in the right direction. A promising fintech lender that is on the up…
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