They just need to keep doing exactly what they are doing IMO, and wait for the macro conditions to change - which they will at some point.
WZR are:
Well funded (both on their balance sheet, and also with their capacity to loan).
Loan originations continue to be strong - with their loan book now getting close to $1b.
Revenues growing strongly to $43m in the first half of this year (up 65% on PCP).
They are raising rates at the front end - to maintain a good nett interest margin.
The quality of their loans continues to be strong (nett loan write offs were 1.3%), and their 90+ day arrears are still low at around 1.07%.
The latest quaterly showed a cash flow positive amount of around $1,500,000.
First half also showed a much improved Cash EBTDA of minus $1.3m - and with the second quarter of the half being a positive Cash EBTDA of $0.5m.
Whilst conditions will get even worse for borrowers in the short term, personally I can't see the much higher interest rates lasting for too long - before the RBA has to start cutting rates again.
These are really interesting times for lenders like WZR, but they appear to be doing a great job of navigating the quick ramp up in interest rates & tougher credit conditions.
So I am backing them to come out the other side as a super strong business - and with a much higher market cap than around the current market cap of $82m.
WZR Price at posting:
6.1¢ Sentiment: Buy Disclosure: Held
