TORONTO, ON, February 3, 2022 – 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.
“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).
Propel is an innovative, online financial technology (“fintech”) company, committed to credit inclusion by providing fair, fast and transparent access to credit with exceptional service using its proprietary online lending platform. Through its operating brands, MoneyKey and CreditFresh, Propel is focused on providing access to credit to the over 60 million underserved U.S. consumers who struggle to access credit from mainstream credit providers. Propel’s revenue growth and profitability have accelerated significantly over the past two years as Propel has been able to facilitate access to credit for an increasing number of consumers, helping them move forward in their credit journeys.
Non-IFRS Financial Measures and Industry Metrics
This press release makes reference to certain non-IFRS financial measures and industry metrics. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Such measures include “Annualized Revenue Yield”, “Ending Combined Loan and Advance Balances” and “Total Originations Funded”. These non-IFRS financial measures and industry metrics are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS financial measures and industry metrics in the evaluation of issuers. The Company’s management also uses non-IFRS financial measures and industry metrics in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of management and executive compensation. The key performance indicators used by the Company may be calculated in a manner different than similar key performance indicators used by other similar companies. Definitions and reconciliations of our non-IFRS financial measures to the relevant reported measures can be found in the Company’s managements’ discussion & analysis.
Presentation of Financial Information
The preliminary, unaudited results included in this press release are based on information available to the Company as of the date of this release. Final reported results could differ from these preliminary results following the completion of year-end accounting procedures, final adjustments and other developments arising between now and the time that the Company’s financial results are finalized, and such changes could be material. The Company’s independent auditor has not audited, reviewed or performed any procedures with respect to the preliminary results included in this press release, and accordingly does not express an opinion or any other form of assurance with respect thereto. In addition, these preliminary results are not a comprehensive statement of the Company’s financial results for the quarter and fiscal year ended December 31, 2021. They should not be viewed as a substitute for audited financial statements prepared in accordance with International Financial Reporting Standards and are not necessarily indicative of the Company’s results for any future period.
Certain information in this press release, including preliminary, unaudited results for Q4 2021, trends and expectations regarding acquisition and data costs, Annualized Revenue Yields of the variable pricing and graduation programs, expected provisions for loan losses and other liabilities and Cost per Funded Origination as the variable pricing and graduation programs develop, constitutes forward looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events.
Although the Company believes that the forward-looking statements in this press release are based on information and assumptions that are current, reasonable and complete, these statements are by their nature subject to a number of factors that could cause actual results to differ materially from management’s expectations and plans as set forth in such forward-looking statements. Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by Propel as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the “Risk Factors” section of the Company’s final prospectus dated October 13, 2021 and the Company’s other periodic filings made available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect Propel; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and Propel expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.
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