In the latest quarterly activities report from Wisr Limited, the company has demonstrated resilience and strategic moderation in its operations. Let's dive into some key highlights that paint a picture of Wisr’s recent performance:
Revenue and Operational Cash Flow:
There was a slight 1% dip in quarterly revenue, down to $24.3M from the previous quarter's $24.6M. However, it’s a notable 15% increase year-over-year from Q1FY23's $21.2M.
The operational cash flow experienced a healthy boost of 22% from the previous quarter, rising to $5.4M.
Loan Book Adjustments:
Wisr's loan book value decreased by 5% to $887M, a strategic move aimed at prioritizing profitability and maintaining a strong balance sheet.
Loan originations also saw a slight decrease to $50M, which is part of Wisr's moderated loan volume strategy.
Financial Health Metrics:
Net Interest Margin (NIM) remained strong at approximately 5.6% for new business written in September 2023.
The company's arrears over 90 days are stable at 1.26%, showcasing a high-quality loan book with an average credit score of 780.
Equity note investments held steady at $48.3M within Wisr Warehouses.
Balance Sheet and Liquidity:
Wisr reported an unrestricted cash balance of $20.3M as of 30th September 2023, slightly down from $21.7M at the end of the previous quarter.
The company also reported having $1.7B in total loan originations to date, reflecting a robust lending history.
Governance and Future Outlook:
There has been a change in leadership with the company’s Chair signalling his intention not to seek re-election, paving the way for a new Chair to take over.
Wisr remains cautious in its loan origination strategy, waiting for favourable market conditions before rescaling.
I spoke with Andrew Goodwin - CEO, immediately after the result:
"We are behaving in a prudent way given the market conditions - the three key takeaways for the quarter are maintaining balance sheet strength...moderated loan volume and… delivering a 22% increase in operating cashflow ."
Commenting on the balance sheet Goodwin said:
"One of the key things is moderated loan volumes - that assists with balance sheet strength and focusing on opex, which was down 20%..."
In commenting on the NIM expansion :
"We hit a NIM number of the new business in September of around 5.6% - anywhere between 5 and 6% on a whole book basis is very attractive.. we've been re-collaborating the business for the last 12-18 months to claw that NIM back."
And finally in regards to scaling - and potential ramifications on earnings :
"We can write significantly more volume currently with no incremental head- count."
In summary, Wisr is showing a calculated approach to managing its loan book and operational strategy amidst an evolving financial landscape. The focus on maintaining a strong balance sheet and profitability, even at the cost of a moderated loan book, speaks to a long-term vision for financial stability.