New Listing – Pepper Money (PPM) $2.61

A new non-bank lender hit the ASX boards yesterday. It was a tough debut for Pepper Money (PML), falling -9.96% though it traded more than 16% below its IPO price at one stage of the day. Pepper Money splashes in the same puddles as one of our key holdings in the portfolio being Wisr (WZR), which we are sitting on a paper profit of 24%. Pepper Money focusses on larger loans with mortgages in Australia & New Zealand accounting for 75% of their operating income. The remaining quarter is largely car and equipment finance. There is no doubt it’s a larger operation, but it doesn’t mean it’s a better one. Wisr’s key difference to Pepper Money – other than it not offering home loans – is it’s technology platform and while Pepper Money is cheap (listing on less than 11x earnings and an expected yield of 3.3% at the IPO price according to the prospectus), it doesn’t have the growth profile of WZR – we see it as a more mature business without a compelling differentiator in a competitive space.

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Wisr (WZR)

LAST UPDATED 26/05/2021 09:33

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Wisr (WZR)

LAST UPDATED 26/05/2021 09:33