Latitude Group Holdings Ltd
ASX:LFS
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Latitude Group Holdings Ltd
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Latitude Group Holdings Ltd
Latitude Group Holdings Ltd. engages in the installment and lending business. The company is headquartered in Melbourne, Victoria. The company went IPO on 2021-04-20. The firm provides products and services that support the needs of customers and merchants and other commercial partners, leveraging its technology and database of customer information. Its business to business to consumer(B2B2C) model focuses on supporting its partners to acquire customers combined with customer engagement for product utilization and other products. The company offers its customers in Australia and New Zealand instalments (L Pay) products and Lending (L Money) products.
Latitude Group Holdings Ltd. engages in the installment and lending business. The company is headquartered in Melbourne, Victoria. The company went IPO on 2021-04-20. The firm provides products and services that support the needs of customers and merchants and other commercial partners, leveraging its technology and database of customer information. Its business to business to consumer(B2B2C) model focuses on supporting its partners to acquire customers combined with customer engagement for product utilization and other products. The company offers its customers in Australia and New Zealand instalments (L Pay) products and Lending (L Money) products.
Customer growth: Latitude added 146,000 new customers in H1, up 15% YoY, pointing to continued demand for its Pay and Money products.
Volume momentum: Purchase volumes were $3.5 billion (up 13% YoY) and Money originations hit a record $783 million, driving gross receivables to $7.0 billion (highest in 5 years).
Margin expansion: Interest income was $588 million (up 16% YoY) with overall operating income margin around 12%; net interest margin rose to 11.7% (up 142 bps YoY).
Profit and returns: Cash profit before tax was $93.5 million (up 40%); cash NPAT was $46.2 million (up 69%); Board declared an unfranked dividend of $0.04 per share (up from $0.03).
Credit discipline: Net charge-off averaged 3.5% over the last 12 months and the portfolio has provisions of 4.35%; management says delinquencies are in line with historical norms.
Efficiency gains: Cash operating expenses were well controlled at $184 million (up 3% YoY) and cost-to-income improved to 45.2% (down 700 bps YoY).
Regulatory watch: Management is monitoring RBA interchange reform but does not expect a material impact and plans targeted actions, including in New Zealand where reform is coming in December.
Competitive posture: Management notes increased pricing-driven competition from banks and fintechs but prioritizes risk-adjusted returns over pure volume growth.
