SocietyOne extends IPO date

SocietyOne CEO Mark Jones said the company is keen on going public, but it’s next year rather than 2021, as he’s been watching closely how its listed peers are trading. “Right now we are just waiting for the right time and we think it will probably be early mid 2022, that depends on how the market is going,” he added. “For us, it’s a little less about the overall IPO market and more about the industry…we actually need our peers and share prices to rally a little bit. “We think the whole industry is performing well and we think that will probably allow us to get through[the trade]at a reasonable price,” Jones said. Mr Jones said non-bank lenders have shown they can take a stake in big banks, but investors are also looking. For scale and growth to turn into profitability. Founded in 2012, SocietyOne expects to be profitable in early 2022. In February, the Australian announced that SocietyOne has selected stockbrokers Morgans and Evans and Partners for a potential ASX listing. The company’s listing plans follow a number of non-bank lender additions. to ASX over the past 18 months, including Liberty Financial, Pepper Money, Plenti, and Harmoney. However, the group’s trading performance was mixed as Plenti stock closed at $1.48 on Thursday against a list price of $1.66. Shares of Harmoney closed at $1.82, but still well below an issue price of $3.50. SocietyOne, Seven West Media, Westpac-backed Reinventure, Consolidated Press Holdings, G&C Mutual Bank and The Australian’s It is backed by shareholders such as its publisher, News Corp. Jones stressed that the lender has expanded its funding base to provide new loans after backing a new $200 million warehouse facility with Westpac. This adds to an existing NAB facility and follows SocietyOne recently completing its first asset-backed security bond issue, in which $182 million in loans were packaged and sold to investors. Mr. Jones said the lender’s funding measures have reduced the cost of funding by 50 to 100 basis points. point. SocietyOne aims to transact asset-backed securities every year. Total loan utilization is $1.2 billion, and lenders expect it to reach $1.5 billion in the second quarter of 2022 as the monthly loan rate increases. The company’s delayed listing plans come against the backdrop of a re-ignited IPO market in the fourth quarter amid a flurry of floats aimed at hitting ASX before the end of the year. These include business bank Judo, disability services provider APM, and Scientific Games spin-off SG Lottery. In terms of business, Mr Jones said application volumes have recovered by up to 50 percent from the last week of September, despite lower loan volumes in July and August as Covid-19 lockdowns hit NSW and Victoria. “We saw a very sharp shift as confidence returned in the last week of September,” he added. Like many of its competitors, its loan debt has remained under control during the pandemic. “Credit has never been better, so with government support Covid-19, low unemployment, people are fulfilling their loan commitments…we’ve never had lower defaults,” said Mr Jones. Moody’s Investors Service’s report on SocietyOne’s bond issuance found that the portfolio’s weighted average interest rate was 12.7 percent, with 84 percent of loans extended to full-time borrowers. SocietyOne is increasing its presence in the broker market, as well as direct channels. Mr Jones said loans made through intermediaries made up about 20 percent of SocietyOne’s volume and he expects this to increase by up to 40 percent in the medium term. The other measure the lender has taken in recent months is to put greater pressure on secured personal loans by providing borrowers with lower interest rates than unsecured loans. For example, personal loans for a car can be secured by the asset. “We see customers taking advantage of this and it’s all about the type of spend,” Mr Jones added.

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