Mercer actuary David Knox says the data used to determine the old age dependency ratio is “totally out of date” and overstates the severity of the problem.
From their inception, SMSFs have always attracted more than their fair share of criticism. Now it’s an ageing membership that’s being used to restrict their numbers.
Is Plenti Worth the Punt?
Shares in consumer lending company Plenti (ASX: PLT) look to have stabilised, having tumbled 25% from the initial IPO price of $1.66. At the time of writing the share price sits at $1.28. Given the haircut applied to the stock in the secondary market, is Plenti worth a punt?
Firstly, what does Plenti do? Formerly known as RateSetter, the company raised $55 million from the take-up of new shares by institutional and retail investors. According to the company, “Plenti is a technology-led consumer lending and investment company. Through the Plenti Lending Platform, it is able to provide a transparent marketplace where investors and borrowers, empowered by technology, can transact together and share the benefits.”
One thing the company makes well clear is that it is not a bank. It is part of a new generation of modern businesses using technology to replace traditional middlemen and reduce the costs of providing financial services. It offers automotive lending, renewable energy (home solar installation) lending and personal lending, all fast-growing areas. Customers take out a loan through Plenti, which is essentially borrowing from other Plenti users of the platform i.e. peer-to-peer (P2P) lending. Investors that lend to these borrowers are paid interest in return. Although the $55 million IPO offering didn’t deliver a stag profit, Plenti has been successful.
The lender has listed with a market capitalisation of approximately $280 million. Plenti chairman Mary Ploughman said: “The board firmly believes that Plenti, with its determined and capable management team, is well-positioned to continue to grow strongly through leveraging its technology platform, as well as the strong foundations it has in place across borrower experiences, its borrower introducer network, its funding diversity and its credit risk management capabilities.”
The company’s fundamentals are not bad. Plenti grew its annual revenue to $41.5 million in the year to June, up from $28 million in FY18/19. Since its launch it has helped more than 55,000 borrowers. The only thing that is of concern is its negative cash flow in the last three years. Plenti is a loss-maker, with a net loss of $16.4 million in the year to June.
The company plans to invest the $55 million raised in the IPO back into itself to fund future growth. Management and shareholders, including Federation Asset Management, are committed to its growth from a loss-making business with a bright path ahead.
