Latitude lifts half-year profit, flags higher margins
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The news: Consumer finance company Latitude has rebounded to a solid half-year profit on the back of strong volumes and flagged increasing margins due to price increases.
The numbers: It posted a half-year net profit of $9 million compared to a $98.2 million loss a year ago suffered following a cyber attack.
Cash profit surged 140% to $27.4 million, but was slightly below analyst expectations of $28.6 million. Revenue was up 6.2% to $529.6 million and the company will not pay any interim dividend.
The context: The non-bank lender’s new lending volumes rose 14% from a year ago to $4.1 billion while receivables are up for a 10th consecutive month. It signed on a further 128,000 new customers in the half year. Net interest margin lifted 31 basis points to 10.1%.
Latitude expects further improvement in margins in the second half of the financial year led by elevated customer demand and as the interest rate cycle turns. It also expects cost of living pressures to result in bad debts slowly but steadily rise to long-term historical levels.
The source: ASX announcement
