Consumer lender Plenti (formerly RateSetter Australia) launches its initial public offering today, aiming to raise A$55 million.
The offer of 33.1 million shares at $1.66 a share will represent 19.6 per cent of total ordinary shares at listing.
Plenti was established in Australia in 2014 as a peer-to-peer lender. It still offers peer-to-peer lending but it has a more diversified funding based these days, including banks, superannuation funds and other institutional investors, and the Clean Energy Finance Corporation.
The company has recently established a warehouse funding facility with one of the major banks acting as senior funder.
It sells personal loans, auto loans and renewable energy loans for the purchase of solar panels and household batteries. Interest rates on all products are risk-adjusted.
The company has originated a total of $870 million of loans and it has around $400 million of loans outstanding. Originations grew 34 per cent to $318 million over the past 12 months and the loan book has grown at a compound annual growth rate of 39 per cent over the past three years.
Last month, the company changed its name from RateSetter Australia to Plenti Group, following the sale of RateSetter in the United Kingdom to Metro Bank.
The Australian company was not part of that transaction but shareholders of RateSetter UK hold 13 per cent of Plenti. Those shares have been placed in a nominee company, with some of the beneficiaries subject to escrow.
The company’s revenue has grown from $16.1 million in 2017/18 to $28.8 million in 2018/19 and $41.5 million in the year to June.
The loan impairment expense was $10.7 million the latest financial year – up from $7.7 million in 2018/19. Credit losses have been around 1.8 per cent of loans funded since launch.
The company reported a loss of $16.4 million for the year to June and a loss of $14.2 million the previous year.
After being cash flow positive in 2017/18 it has had cash outflows from operating activities in the past two financial years.
The company’s board is chaired by Mary Ploughman, who was chief executive of Resimac for 17 years, and the chief executive is co-founder Daniel Foggo.
According to the prospectus, the company’s competitive advantages lie in its diverse funding base, its multi-channel distribution (60 per cent of sales are through brokers) and its technology. Its digital-first platform “facilitates simple and rapid loan application experiences” and efficient processing.
It also has its own credit engine, which allows it to price for risk using a proprietary scorecard. The average customer pays 7.9 per cent for a car loan, 9.9 per cent for a renewable energy loan and 14 per cent for a personal loan (these are “all-in” rates, including fees).