ASX Listed Results Bite - Wisr

"We are behaving in a prudent way given the market conditions"

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:

  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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.