Propel Holdings Inc. (“Propel” or the “Company“) (TSX: PRL) today provided an update on certain operating results as at December 31, 2021 (“Q4 2021“) and declared a dividend for the first quarter of 2022. All amounts are expressed in U.S. dollars unless otherwise stated.
Record Loans and Advances Receivable and Total Originations Funded1
Propel expects to report record loans and advances receivable of between $103 million and $106 million as at December 31, 2021, representing year-over-year growth of between 100% and 105%. The Company also expects to report Ending Combined Loan and Advanced Balance1 growth exceeding 110% as at the end of Q4 2021 compared to the prior year. Additionally, Propel expects to report Total Originations Funded1 of between $88 million and $90 million in Q4 2021, or between 93% to 98% growth as compared to the prior year. The growth in loans and advances receivable and Total Originations Funded1 is the result of the successful launch of variable pricing and graduation capabilities, greater geographic coverage, seasonality, and rising overall consumer demand. The Company expects an increase in acquisition and data costs commensurate with the higher origination volume in Q4 2021.
The variable pricing and graduation capabilities rolled out at the end of Q3 2021 performed stronger than expected in Q4 2021. While both programs are expected to carry lower Annualized Revenue Yields1 than the Company’s traditional programs, the Company expects lower relative provisions for loan losses along with lower Cost per Funded Origination1 to drive continued growth in profitability and cash flow over the long term. The rollout of these capabilities is aligned with advancing Propel’s mission of improving credit inclusion across the credit spectrum.
Consistent with the Company’s strategic growth plan, Propel advanced the geographic presence of its programs over the course of Q4 2021. During the quarter, the Company facilitated the expansion of bank partner programs into six new U.S. states through the MoneyKey brand, and seven new U.S. states through CreditFresh.
“The Propel team seized the opportunities from rising consumer demand, favourable seasonality and a wider product offering to deliver record origination volumes in Q4 2021. This was a tremendous milestone to achieve and an exciting way to cap a transformational year. We are executing on our growth strategy while furthering our mission to provide access to credit to an even broader group of underserved consumers,” said Clive Kinross, Chief Executive Officer.
Note 1: See “Non-IFRS Financial Measures and Industry Metrics”.
Declaration of Dividend
Propel also announced today that its board of directors has declared a dividend of C$0.095 per common share, payable on March 10, 2022 to shareholders of record as of the close of business on February 17, 2022. The Company has designated this dividend as an eligible dividend within the meaning of the Income Tax Act (Canada).