Picked up another 190,000 WZR shares @ 5.2 cents today. Time...

Picked up another 190,000 WZR shares @ 5.2 cents today.

Time will obviously tell if this was good move - especially as sentiment is just horrific for microcap lenders at the moment (with interest rates increasing quickly).

But at a market cap of just $70m, I do like these points about WZR:

Market cap is now only around 1 x yearly revenue.
Revenues still growing (although growth should slow going forward).
Good cash balance of around $70m - with around $23m in unrestricted cash.
The WZR business is now pretty much cash flow neutral.
Management are raising rates for their clients as soon as possible, and they have stated they are really focussed on getting to profitability ASAP.
Their 90 day arrears were 0.98% in their last quarterly report.
They have a really high average credit score of 801.

I particularly liked these 2 x statements in the last 4C report:

"While remaining cognisant of current market conditions, Wisr is focused on delivering both profitability in the short-term and sustainable long-term profitability.

Wisr has the resources and capability in place to achieve this, including a strong cash-balance sheet, rate and pricing levers and reductions in operating costs being put in place for FY23".

And the CEO Anthony Nantes said:

“We have our sights set firmly on moving through breakeven and into sustainable profitability as our next goal.

Our credit decisions and products are prime-skewed to bank-grade customers.

As we did in COVID, we’re well prepared to navigate market conditions with early warning indicators already in place to respond quickly and tighten credit while also investing in our collection processes.

We’re in a solid position to absorb BBSW increases while still earning a very healthy NIM with multiple levers available, including raising interest rates on new loans, in line with Wisr’s credit risk appetite, which we have been doing throughout the quarter.”

Looking forward to the upcoming report.