Most here don't seem to realise what happened Monday.
The dream died.
1. The asian strategy is 100% a failure with no chance of a fix.The Indo business has an average balance of
$3.60. A quarter of a million accounts at $3.60 each. How long has management known that? Is the board investigating the possibility of fraud? Either by customers gaming a member-get-member campaign? Or by a marketing agency or partner?? That smells like something has gone very wrong.
The Malaysian business has an average balance of
$100. Again - sadly laughable. If management think otherwise, where is the explanation of how this business model is meant to ever work?
Are they really going to expand to Thailand on the back of this. That would be corporate suicide.
2. The company is now verging on delusional
How could a rational manager put out that result without also putting out a clear plan that deals with the reality? The only path is to close the asian businesses. The faster the better. They are burning shareholder money every day there is no announcement. How long has management known these metrics and done nothing? Asia is over. In the last year they have burnt a third of their cash. Please stop.
3. The marketing of the Australian business has lost its way.
RAIZ used to be the lowest-cost acquirer of customers in fintech. Then they met SevenWest M&A team. Those Armani suits and strong cologne are a heady mix. "Give us 6% of the company and lets advertise you to GenZ... on TV" They dont call the TV series "Madmen" for nothing.
Worse... lets launch th campaign in the middle of serious market downturn! The YOY result for the launch month of the TV campaign halved the previous year's result. Half. Why do any marketing in a downturn? Hold your cash and fire up marketing in upturns. Swim with the tide. RAIZ's cost of acquisition must have gone through the roof this year.
4. They have two CEO's.
It can work, but mostly doesnt. Maybe it made sense when you have a domestic and an international business. That will end soon. Two CEO's are expensive. RAIZ is now a small Australian company that might be profitable if it wakes up and realises it is a small Australian company.
The future
The biggest game in australian finance is mortgages. Have you seen the profit of the banks? Be a platform for Australians to save for a first home. For some customers RAIZ is basically that now. just say it. Av FUM will jump if u get more home-savers. Then offer decent mortgage products. Tie the whole business to this. It's the only chance of being sizable. Then get bought by ING.
In the meantime, its not too bad being a small profitable business. Better than being a delusional global business on fire.
Would love to see a contrary analysis.
(20min delay)