Ann: 1H22 results presentation, page-18

Investors should hopefully do very well holding Plenti over the medium to long term. The company intends to significantly increase its loan book and therefore its revenue, as well as materially reduce its relative cost and should benefit as interest rates begin to rise progressively.

They expect to grow their loan book to $5 billion by calendar year 2025 (within the next 3 years), that is a 4 fold increase from today. Daniel Foggo expects Plenti can achieve this organically as it plays in two high growth verticals, being automotives (particularly electric vehicles) and renewables, which are both thematics right now and going forward. For personal loans, they are taking market share from the bigger incumbents and this is growing nice and steadily. For automotive finance, Daniel noted they have been taking share from the big banks like Westpac and Macquarie Bank which have exited this space.

On the cost side, they expect to reduce their cost to income ratio from 55% to 35% over the medium term (within 2-3 years and before their loan book target), which for example should happen from greater cost operating leverage as the company scales with a larger loan book and through reduced funding costs (e.g. recent funding arrangements have reduced cost by 100 basis points). To demonstrate strides toward this target, they have guided to a cost to income ratio of under 50% for 2H22 - so will be interesting to see where that lands when they announce results soon.

On the credit loss side, they do really well. They have a really low loss rate compared with the big 4 banks. Foggo explains this is in part due to Plenti's borrower customers having an average credit score of 820, significantly above the borrowers of big 4 banks at just over 700.

Think about this picture in 2-3 years time, significantly increased revenue base (through 4x current loan book and interest rate rises) and a materially reduced cost to income ratio of 55% (instead of 35%). That should in theory give rise to nice profitability and decent EPS assuming its share count remains as is.

I am confident Plenti and Foggo can achieve the targets set out as they have demonstrated they can achieve what they've promised to do by hitting or exceeding their targets over the last year and half of its listed life.

With its share prices nearing 52 week lows and 30% below IPO price (undeservingly), and given what they've achieved to date and their future ambitions, I think it looks really good for a top up for patient investors.

The 12-month price targets given by a couple of analysts are at an average price of $1.97 and a strong buy rating. Even if we get half way there, that would be great returns for investors particularly in volatile environments.

Finally, a reminder that this is a founder led business, with Daniel Foggo holding a nearly 21% stake in Plenti. That ensures great alignment of interest with shareholders to help the business to perform and achieve its targets. He has around $30m paper wealth at risk!