After its first full year as an automotive finance specialist, Money3, has reported strong growth in the size of its loan book and revenue. But it was not all straight driving, with higher impairments, provisions and expenses holding back earnings growth.

Money3 reported that for the 12 months to June originations grew 28.1 per cent to A$247.7 million. Its loan book grew 16.4 per cent to $433.8 million, with 52,000 loans in the portfolio.

That book is all auto finance, after the company acquired Go Car Finance in New Zealand in March last year and sold its small amount credit contract business two months later.

Revenue rose 35.3 per cent to $124 million in the year to June.

The company said demand for vehicles increased after the initial period of COVID-19 lockdown and borrowers had a strong focus on paying down loans.

Lending dipped sharply in April and May but was back to pre-COVID levels by June and climbed to record levels in July. The April low was $9.9 million and the recovery in June was $23.5 million.

The bad debt charge jumped from $13.1 million to $23.6 million and the movement in allowance for impairment losses rose from $2.5 million to $14.4 million.

Advertising expenses, finance costs and depreciation all rose and there was a loss on disposal of an asset.

The bottom line result was a profit of $24.2 million – down from $28.4 million in 2018/19.

The company preferred to focus on “normalised NPAT (continuing operations)” of $30.3 million, which was up 30.1 per cent on the previous year.

The Australian business accounted for $102.7 million of revenue and $36.5 million of pre-tax profit, while the New Zealand business contributed $21.3 million of revenue and $2.3 million if pre-tax profit.

The loan receivables are split $316.5 million in Australia and $70.7 million in New Zealand.