MoneyMe Limited (MME.AX) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the 2025 Annual General Meeting of MONEYME. My name is James McPhee, and I'm the Chair of MONEYME. I would like to begin by acknowledging the traditional custodians of the land on which we meet today, the Gadigal people of the Eora Nation and their connections to land, sea and community. I pay my respects to their elders, past and present and extend that respect to all Aboriginal and Torres Strait Islander people joining the meeting today. It's 11:00 a.m. in Sydney, which is the nominated time for the meeting. I've been advised by the Company Secretary that a quorum is present, so I'm pleased to declare the meeting open. Joining me here today are Clayton Howes, our Managing Director and Chief Executive Officer; Dave Taylor, Non-Executive Director, Chair of the Remuneration and Nominations Committee and Interim Chair of the Audit and Risk Management Committee; Susan Hansen, Non-Executive Director; Scott Emery, Non-Executive Director; Jonathan Swain, our Company Secretary; and Claire Scott, audit partner from our auditor, Grant Thornton. Joining us by telephone is David Wright, our Chief Financial Officer. The agenda for today's meeting is set out in the Notice of Meeting. The Notice of Meeting was made available to shareholders and lodged with the ASX on the 17th of October 2025, and I propose to take this as read. This year's AGM has been convened as a physical meeting, and we're also providing an audio webcast of the meeting for shareholders who prefer to listen to the proceedings of the meeting remotely. Before we move into the formal part of the meeting, I would like to give a brief introduction of MONEYME and share some reflections on the year and talk a little bit about how MONEYME is delivering on its strategy. I'll then hand over to Clayton Howes, our CEO and Managing Director, who will take you through the operational and financial highlights in more detail and our results for the first quarter of the 2026 financial year, along with our strategy going forward. MONEYME is a founder-led non-bank lender built for customers, who expect more from their companies they engage with. From the outset, the ambition has been to challenge outdated industry practices and make finance fairer, faster and fit for a new generation. MONEYME's loans and credit cards are designed to deliver a better end-to-end experience from seamless digital interactions to loans that settle in minutes. Powered by the state-of-the-art technology, the company has earned a reputation for market-leading speed and innovation, while leading the charge in sustainable business practices as a certified B Corporation. With this challenger mindset, MONEYME has delivered several industry-first innovations and gained traction in a market dominated by the major banks. What began with personal loans in 2013 has expanded into a range of personal lending, car finance, credit card and financial wellness products, spanning the customer credit life cycle and servicing a larger part of the market. To date, the group has funded more than $5 billion in loans and nearly 0.5 million customers have chosen MONEYME, as their finance provider. The Board continues to evolve to support MONEYME's future growth and success. And with the departure of Non-Executive Director, Rachel Gatehouse, in August of 2025, Dave Taylor has been appointed as Interim Chair of the Audit and Risk Committee. We intend to appoint another Non-Executive Director next calendar year. With that, I'd like to take this opportunity to recognize and thank my fellow Board members for their expertise and contribution throughout the year. It's much appreciated. During FY '25, MONEYME continued to advance its environmental, social and governance agenda with a strong focus on delivering better outcomes for customers and the broader community. This includes enhancing data security to safeguard customers in an ever-evolving cyber risk landscape as well as maintaining high approval rates for financial hardship assistance well above the industry average. The company has also deepened its social impact through targeted community partnerships. Through its World Vision sponsorship, MONEYME now sponsors 136 children in the community of Busakira in Uganda, making it the single largest sponsor in the region. This partnership is helping improve literacy, strengthen child protection and build community-based well-being systems. Members of the team recently visited Busakira to engage directly with the community and see the impact firsthand. In addition, MONEYME supports Waves for Water in the Philippines, providing water filters and on-ground assistance after severe flooding. These efforts have provided thousands of households with access to clean drinking water. These initiatives demonstrate MONEYME's commitment to creating lasting value for both customers and communities it operates in. FY '25 was a year of renewed momentum, complemented by an improved operating environment. After a prolonged period of elevated interest rates, cuts by the Reserve Bank of Australia in the second half of the financial year have contributed into a reduced -- reduction in our cost of funds, growing customer demand and improved credit risk. Combined with strong investor appetite for Australian private credit and asset-backed securities, the environment has become more conducive to growth than we have seen for some time. MONEYME executed its strategy while significantly growing its loan book in FY '25. The company's strategy, which focused on extending our technology leadership, loan book strength and capital adequacy and capital efficiency has provided a solid foundation to continue to deliver sustainable long-term growth. MONEYME executed across all key strategic objectives, including strengthening our technology edge through increased AI deployment and automation, enhanced loan book quality by targeting secure and high-quality assets, expanding funding capacity on favorable terms, providing significant runway to support MONEYME's long-term growth ambitions, preparing for up-and-coming product launches with mass market appeal through continued innovation, strategic partnerships and brand investment and advancing our ESG agenda to further our positive impact for customers and stakeholders. Importantly, in the first half of FY '25, MONEYME secured a new $125 million corporate facility with iPartners, which replaced the previous corporate facility on substantially better terms. The increased size of the facility means the business is well capitalized for the foreseeable future. With approximately $700 million in asset-backed securitizations during the year, MONEYME is now firmly on the radar of the global debt capital markets. These transactions provide efficient, scalable debt funding that increases our operating leverage as the loan book grows. In closing, I'd like to thank Clayton and the MONEYME team for their strong execution in FY '25. Their efforts have ensured that MONEYME is resilient and well positioned for the next phase of growth. With that, I'll now hand over to Clay for his presentation.

Thanks, Jamie. Good morning, everyone. I'm privileged to speak with you today as we review MONEYME's performance for the past year and our strategic priorities for FY '26 that are creating future value. In FY '25, MONEYME delivered high-quality growth, enhanced its funding program and accelerated the integration of AI across the business. We advanced every element of our strategy, reinforced our competitive position and created a solid platform to expand our share of the market and deliver profitable scale. We delivered a step change in growth, increasing new originations by 54% and growing the loan book by 28% to $1.6 billion. Importantly, this growth was achieved whilst building a higher credit quality portfolio. We generated cash in the year with an operating cash profit of $24 million, which included a $10 million one-off cash benefit from structuring our warehouses more efficiently. This is a strong uplift from an $8 million loss in FY '24. Alongside growth, the key drivers behind the result are our strong credit performance, enhanced capital structure and cost-efficient operations. Our focus on high credit quality borrowers and secured assets has significantly lowered credit losses from 4.5% in FY '24 to 3.4% in '25. This strategic focus has also resulted in higher loan amounts and longer loan terms, delivering higher customer lifetime value. Importantly, the strong credit performance is delivering more favorable funding terms and strong demand for our asset-backed securitizations. Our $125 million corporate facility with iPartners reduced our cost of funds, while securing enough working capital to deliver on our long-term growth ambitions. We also executed 2 ABS transactions, including our first transaction into the auto asset class. This momentum has continued into FY '26 with a personal loan ABS transaction executed in July, while our second auto ABS is being structured at this moment. When settled, this transaction will release cash and lower our funding costs. We grew efficiently, maintaining a cost-to-income ratio below 25%. Now looking at our results more closely, MONEYME delivered gross revenue of $208 million and a net interest margin of 8%. The downward trend in recent years reflects the increased proportion of secured assets and that shift to a higher credit quality book. With our objective of building a more robust and better performing loan book achieved, the ratio of secured assets is now stabilizing as we focus on balancing the mix with growth in personal loans and from the next half, credit cards. Quarter-on-quarter, the revenue trend is very pleasing, and we expect to see a significant increase in revenue in FY '26. Normalized NPAT loss of $16 million. This reflects growth-related costs and lower margins of higher credit quality and secured assets. Funding and credit loss benefits from the higher credit quality book continue to be realized and will drive improved margins over time. Our cost-to-income ratio of 24.6%. Given our strong growth and investment in technology and AI, I'm pleased with our cost management, enhanced credit profile. At year-end, our average Equifax credit score was 790 and our ratio of secured assets was 62%. Our funding capacity increased by 20%. So our total funding capacity was $2.1 billion at the end of FY '25. Our momentum carried into the first quarter of this financial year '26 with strong performance across all key metrics, including revenue growth. Gross revenue was $58 million for the quarter. With secured assets now stabilizing at around 60% and a larger loan book achieved, revenue continues to trend upwards this financial year. Loan growth, we continued -- we originated $261 million in new loans, our highest quarterly origination since FY '22. This increased our loan book to $1.65 billion, progressing towards our medium-term target. We have stronger credit performance. Our credit losses continue to come down in line with the higher credit quality of our loan book, reducing to 3.1% in the quarter. We have lower cost of funds. Funding optimizations and our personal loan ABS transaction completed in July delivered further cost efficiencies with our cost of funds reducing to 6.7%. We have stronger risk-adjusted NIM. I'm pleased to see our risk-adjusted net interest margin increasing in this first quarter. Our NIM is what we call it, is a strong measure of our profitability as it reflects our margin after accounting for expected credit losses. We expect our NIM to continue to grow with declining credit losses and reducing our cost of funds. These achievements reinforce our ability to scale sustainably, while maintaining a strong focus on credit quality and capital-efficient growth. Over the last 3 years, we have invested in restructuring our funding program to increase capital efficiency and create significant growth runway. We've optimized our warehouses for each asset class, establishing ourselves as a regular issuer of asset-backed securitizations, whilst expanding our domestic and offshore investor base. With ongoing ABS issuance and $50 million of undrawn and available corporate working capital, MONEYME has the capital structure and liquidity in place to meet its long-term growth ambitions. Our proprietary technology and product innovation are focused on saving our customers' time with seamless customer journeys, fast loan approvals and customer service happening in seconds. This relentless focus on customer experience is reflected in strong customer satisfaction and strong advocacy with both our Net Promoter Score and average review ratings far exceeding the industry's benchmarks. Artificial intelligence continues to be an important part of our technology road map. In FY '25, we increased our AI development, strengthening our operational efficiency and enhancing customer experiences. Generative AI was deployed to enhance our customer service with AI-assisted customer communications achieving up to 30% higher customer satisfaction. AI is also streamlining complex operational workflows and enhancing decisioning across the business, furthering our technology advantage even more. With significant advancements already achieved, we are targeting a 30% reduction in repetitive manual work over this next 2 years. MONEYME enhanced its product offering and expanded distribution channels to capture new market segments and the larger share of the market. In FY '25, we doubled our personal loans broker network and increased Autopay referral partners by more than 50%, while enhancing our online customer journeys to drive stronger conversion and support direct customer acquisition. Scale advantages and our maturing funding program have enabled us to sharpen our customer rates and compete head-to-head with the major banks on price, providing a strong value proposition for both customers and our partners. This has allowed us to attract high-value customer segments, which is reflected in higher average loan amounts, higher credit quality and an increased number of homeowners in our customer base. In FY '25, we expanded and optimized our distribution channels to drive high-quality growth. We also launched an out-of-home brand awareness campaign, which is resonating with this market. Our core offerings are Autopay vehicle loan products, personal loans and credit cards. Our Autopay book reached $912 million in FY '25. And with high average Equifax score and a higher average loan term of 6 years, this is part of our portfolio that provides stability and long-term income. Autopay is currently offered through our brokers and dealership partners. In the first quarter of FY '26, we expanded into private sales market, which accounts for more than half of used car sales in Australia, and a direct-to-customer product will launch in this next calendar year. As we build on Autopay's growth and broaden its distribution, we are also focused on growing our personal loan product and reigniting credit card growth with a new product launching this financial year. This credit card represents a significant growth opportunity with attractive margins. Now looking ahead and in summary, our strategy for FY '26 focuses on 5 key pillars: one, extending our technology advantage. We will continue to invest in artificial intelligence and automation to enhance customer experiences and operational efficiency. Two, focusing on high credit quality and secured assets. We will continue to grow secured lending, particularly in auto finance, leveraging our expanded funding capacity. This growth will be balanced with growth in personal loans and credit cards to support a strong risk-adjusted net interest margin. Third, optimizing our funding program. We will continue to leverage the ABS market and scale advantages to drive further funding cost efficiencies. The fourth, expanding product offerings. We will continue to expand our product offering and distribution to capture more market share. This includes launching our new credit card product and direct-to-customer distribution for our vehicle finance product, Autopay. And the fifth is leading with ESG. We remain committed to strong ESG practices, which resonate with socially conscious customers and investors. By staying focused on these priorities, we are confident in delivering sustainable growth, operational efficiency and long-term shareholder value. Operating cash profit and normalized NPAT have a positive trajectory as we continue to execute on our strategy. MONEYME's growing loan book, increasing operating leverage, reducing credit losses and improving cost of funds are driving a stronger risk-adjusted margin and will see us return to and accelerate normalized profit in time. In closing, I extend my gratitude to the MONEYME team for their continued innovation, your dedication and to our future success, our Board for their guidance and our customers and shareholders for their trust and partnership. Thank you. I look forward to answering any questions you may have later. And Jamie, I'll hand back to you now for the formal part.

Thanks, Clay. And that now brings us to the formal part of the meeting. I'll start by explaining the arrangements for asking questions and voting on the formal items of business. As set out in the notice of the meeting, shareholders can raise questions at this meeting from the floor here in Sydney. Only shareholders and proxy holders holding yellow voting cards or blue non-voting cards will be entitled to ask questions from the floor. Visitors holding red cards are not entitled to speak at the meeting. If you wish to raise a question from the floor, could you please hold up your yellow or blue card. When I call you to ask for your question, a roving mic will be brought to you. Could you please and identify yourself? And if you are a proxy or representative of another shareholder, state the name of that shareholder. You may then ask your question. Shareholders were also given the opportunity to lodge questions on notice in advance of today's meeting via the MUFG Corporate Markets Investor Center. MUFG have confirmed that no questions were lodged via the investor center. I ask all shareholders to keep your questions to the point so that all shareholders have a reasonable opportunity to comment and ask questions. We ask that shareholders limit the number of questions to 2 at a time. We reserve the right to rule out questions that do not relate to the business of the meeting or questions that are the same or substantially similar to questions that have already been answered. Otherwise, we'll endeavor to answer as many of your questions as we can. As Chair of the Board, I've determined that voting on each of the resolutions to be considered at this meeting will be conducted by a poll. Shareholders were given the opportunity to exercise a direct vote before the start of the meeting by lodging the voting form that accompanied the notice of the meeting. Shareholders were also given the opportunity to appoint a proxy to vote on their behalf at this meeting by lodging the voting form that accompanied the notice of the meeting. As set out in the notice of the meeting, as Chair, I will vote all directed proxies in accordance with the directions provided by the shareholder and will vote all undirected proxies in favor of all resolutions. Shareholders and proxy holders, who are attending the meeting in person today and who have not exercised a direct vote before this meeting should have received a yellow voting card on entry to the meeting. If you did not receive a yellow voting card, please see a representative of the MUFG Corporate Markets, who are located at the registration desk just outside this room. Shareholders and proxy holders holding yellow voting cards will be invited to cast their votes on all resolutions by completing the voting cards and placing them in voting boxes. Representatives of the MUFG Corporate Markets will circulate the voting boxes after all resolutions have been discussed and before the poll closes. Shareholders, who have joined our audio webcast this morning will not be able to ask questions or vote through the webcast. The first item of formal business is to be received and consider the company's financial statements and report for the financial year ended June 30, as set out in the annual report. This item of business does not require shareholders to vote on a resolution or to formally adopt the reports. Shareholders on their proxies may comment on or ask questions about the financial statements and reports about the management of the company. Shareholders may also ask questions of the company's auditor, Grant Thornton, who's here today in relation to the conduct of the audit, the preparation and content of the audit report, accounting policies adopted by the company and the independence of the auditor in carrying out the audit.

I will now address any questions relating to items of this business or any general business questions. Are there any questions? Okay. Well, if there's no -- thank you, then as there's no questions have been asked on this item of business. We'll now move on to consideration of the resolution for which shareholder approval is sought at this meeting. Move to the next one. Shareholders will note that as announced to the ASX yesterday, Resolution 3 set out in the notice of the meeting dated the 17th of October 2025 has been withdrawn and will not be considered at this meeting. Shareholders are asked to consider the remaining 4 resolutions set out in the Notice of Meeting. For each proposed resolution, I will introduce the resolution and there will be an opportunity for shareholders present at the meeting to ask questions on that resolution. Once there are no further questions, I'll call for shareholders to vote on the resolution and display a slide showing the total direct and proxy votes received on that resolution prior to the meeting. As I previously explained, voting on each resolution is by poll. The poll for each resolution is now open and will close 5 minutes after the end of this meeting. The results of the poll will be released on the ASX company announcements platform and made available on the company website after close of the meeting. We will now consider Resolution 1, which is the non-binding and advisory vote on the company's remuneration report for the year ended 30th of June 2025. The remuneration report is set out at Pages 32 to 43 of the FY '25 annual report. I now move that the company's remuneration report for the financial year ended 30th of June 2025 be adopted. I will now address any questions relating to this resolution. Are there any questions? Thank you. As there are no questions on this resolution, I'll now put the resolution to the meeting. The direct and proxy votes received for this resolution prior to the meeting are shown on this slide. We will now move to consider Resolution 2. Resolution 2 is the reelection of Scott Emery, as a director. Scott is required to retire at this meeting in accordance with the company's constitution and being eligible, offers himself for reelection. Information relevant to Scott's proposed reelection is set out in the explanatory notes that accompany the Notice of Meeting. And I note that each director supports his reelection. I'll now invite Scott to address the meeting.

Thanks, Jamie. Good morning, ladies and gentlemen. I'm pleased to be standing for reelection to the MONEYME Board. I'm a Co-Founder of MONEYME and have been a Non-Executive Director of the company from its inception. I'm a member of the Board's Remuneration and Nomination Committee. I've also 30 years' experience in establishing and running property development companies across Australia. I'm the Founder and Managing Director of Commercial Building Company, Yarra Valley Commercial, which was established in 1986 and has grown to be a national shop fitting and building company. Through my long association with MONEYME, I've gained an excellent in-depth understanding of the business. I believe my professional skills and experience have enabled me to make valuable contribution to the company in my role as a Director and Board Committee member. It's a privilege to serve you as a Director of this company, and I hope to continue to do so in the future. I'll now hand back to Jamie. Thanks. Thank you.

Thank you, Scott, and we appreciate your contribution and your deep knowledge of the company is very valuable. I now have the pleasure in moving that Scott Emery, who retires in accordance with Rule 7.1 F1 of the company's constitution and being eligible for reelection, is reelected as a company director. I'll now address any questions relating to this resolution. Are there any questions? Thank you. As there are no further questions on this resolution, I'll now put the resolution to the meeting. The direct and proxy votes received for this resolution prior to the meeting are shown on the slide. As previously noted, Resolution 3 has been withdrawn and therefore, now -- we now move to Resolution 4. Resolution 4 is for the approval to issue 7,777,778 performance rights to Clayton Howes, the company's Managing Director and CEO under the company's employee equity incentive plan. The number of performance rights proposed to be issued represent approximately 0.9% of the issued capital of the company. The Directors consider that the proposed issue of performance rights is an integral part of effectively rewarding and incentivizing Clayton in a manner that aligns his interest with those of shareholders and is a key component of an appropriately structured remuneration package. Details of Clayton's current remuneration package as Managing Director and CEO are set out in the notice of the meeting. Further details about this resolution are contained in the explanatory notes to the Notice of Meeting. I now move that for the purpose of ASX Listing Rule 10.14 and for all other purposes, shareholders approve the issue of 7,777,778 performance rights to Mr. Clayton Howes, the company's Managing Director and Chief Executive Officer under the MONEYME Employee Equity Incentive Plan and otherwise on the terms and conditions described in the explanatory notes to the Notice of Meeting. I will now address any questions relating to this resolution. Are there any questions? Thank you. As there are no questions on this resolution, I'll now put the resolution to the meeting. The direct and proxy votes received for this resolution prior to this meeting are shown on this slide. We will now move to Resolution 5, our final resolution today, which is for the approval to renew the proportional takeover provisions in Rule 15 of the company's constitution. Rule 15 of the company's constitution is set out in attachment 1 to the Notice of Meeting. Under Section 648G of the Corporations Act, proportional takeover provisions must be renewed every 3 years or they cease to have effect. The company is now seeking to renew these provisions. If Resolution 5 is passed, the proportional takeover provisions included in Rule 15 of the constitution will have effect for further 3 years from the date the resolution is passed. As required by Section 648G, Resolution 5 is being proposed as a special resolution. This means to have effect. Resolution 5 must be passed by at least 75% of the votes cast by shareholders, who are entitled to vote on this resolution. For the reasons set out in Notice of Meeting, the directors considered the renewal of these provisions to be in the best interest of shareholders. I will now move that pursuant to Section 648G(4) of the Corporations Act, the proportional takeover provisions in Rule 15 of the company's constitution be renewed for a period of 3 years. I will now address any questions relating to this resolution. Are there any questions? Thank you. As there's no questions on this resolution, I'll now put the resolution to the meeting. The direct and proxy votes received for this resolution prior to the meeting are shown on this slide. I note that based on the direct and proxy votes received prior to the meeting, the resolution does not yet have the required level of support as a special resolution, although it is supported by a majority of votes cast before the meeting. However, we will proceed with voting on this resolution, and we'll announce the final result to the ASX as described earlier in the meeting. Well, that attends -- that ends the formal part of our 2025 Annual General Meeting, and I now declare the meeting closed. Would all shareholders and proxy holders, who are present here at the venue and wish to vote on the resolutions proposed today being Resolutions 1, 2, 4 and 5 on your voting cards, please now complete your yellow voting cards and then place them in the voting boxes being circulated by representatives of MUFG Corporate Markets. The results of the meeting will be announced on the ASX company announcements platform and will be available on the company's website as soon as possible after the close of the meeting. Well, thank you for participating in our Annual General Meeting today, and we look forward to your continued support in the coming year. Shareholders, who are here today at the venue are invited to join the directors for light refreshments. Thank you.