Wisr Limited's Financial Performance: A Year of Contrasts
WISR LIMITED (WZR) Share Update August 2024 Tuesday 27th
Wisr Limited Reports Significant Loss Despite Revenue Growth
Wisr Limited (ASX: WZR) has released its preliminary final report for the year ended 30 June 2024, revealing a complex financial landscape marked by modest revenue growth but significant losses.
Instant Summary:
- Revenue from ordinary activities increased by 2% to $93.8 million.
- Loss from ordinary activities after tax decreased by 38% to $8.2 million.
- Overall loss for the year surged by 91% to $21.9 million.
- No dividends were declared or paid during the reporting period.
- Net tangible asset backing per ordinary security fell from 4.48 cents to 2.89 cents.
Financial Performance Overview
Wisr Limited reported a 2% increase in revenue from ordinary activities, reaching $93.8 million for the year ended 30 June 2024. Despite this growth, the company faced a significant overall loss of $21.9 million, a 91% increase compared to the previous year's loss of $13.2 million. The loss from ordinary activities after tax, however, decreased by 38% to $8.2 million.
The company did not declare or pay any dividends during the reporting period. The net tangible asset backing per ordinary security also saw a decline, dropping from 4.48 cents to 2.89 cents.
Operational Highlights
Wisr's portfolio yield improved to 10.90%, up from 10.17% in FY23. The portfolio's Net Interest Margin (NIM) was 5.23%, slightly down from 5.47% in FY23. The company moderated its loan origination volume for most of FY24, resulting in a total new loan origination of $210 million, down from $495 million in FY23.
Operating expenses were reduced by 19% to $26.5 million, and the cost-to-income ratio improved to 28% from 36% in the previous year. Despite these efforts, the company reported an EBITDA loss of $2.3 million, compared to a loss of $0.5 million in FY23.
Balance Sheet and Funding
In May 2024, Wisr secured a $50 million corporate facility from Nomura, a global financial services group. This move strengthened the company's balance sheet, resulting in a 31% increase in unrestricted cash to $28.4 million. The company also reported a total loan book of $770 million, down from $931 million in FY23.
Wisr's customer engagement remained strong, with a Net Promoter Score of +78. The company facilitated $2.7 million in round-ups on customer debt and $26.4 million in extra loan repayments during FY24.
The financial results reflect a challenging year for Wisr Limited, marked by a strategic shift towards moderated loan volumes and cost management. The increase in overall loss and the decline in net tangible assets could negatively impact investor sentiment. However, the improved portfolio yield and reduced operating expenses are positive signs of the company's efforts to stabilize its financial performance.
Investor Reaction:
Analysts are likely to have mixed reactions to Wisr's financial performance. The significant increase in overall loss is concerning, but the company's strategic initiatives to improve yield and reduce costs may be viewed positively. Investors will be keen to see how Wisr plans to leverage its strengthened balance sheet and new funding to drive future growth.
Conclusion:
Investors should closely monitor Wisr's strategic initiatives and financial performance in the coming quarters. The company's ability to navigate the challenging economic environment and return to growth will be crucial in maintaining investor confidence.