I've been buying a few of these lately based on the expectation that they will do well later this year but reckon they have a decent chance of a stellar performance this quarter.
Loan origination growth last Q came in at 49% pushing the total loan book upwards of $50m. Given that momentum continues to grow and that xmas is typically a busy time my expectation is that total loan origination will this quarter step up by at least the same 49%. This would give a loan book target of $69m.
Based on the research report the company had commissioned the margin on the loan book is around 2.2% and loan establishment fees are around 4.1% so if the book has indeed grown to $69m then the it comes down to staff and admin costs for this quarter as to if the company can hit a modest cash outflow of around $600k. The March quarter however should be getting close to neutral with the June quarter likely to be cash flow positive.
