Building Australia’s
best lender
Annual Report
2021
Traditional lenders can be:
Slow
Complicated
Poor value
Plenti uses smart
technology to provide
faster, fairer loans so our
customers can bring their
big ideas to life.
We’re taking market share
in three large lending
verticals and we’re just
getting started.
Our opportunity
Automotive
Renewable energy
Personal
$33bn+
annual lending1
estimated penetration
1%
>378K
households installing
solar annually2
estimated penetration
7%
$12bn+
annual lending3
estimated penetration
2%
Includes consumer and commercial lending segments. ABS 5601.0 Table 7 LTM to Jun-20, and ABS 5671.0 Table 9 LTM to Nov-18; ABS discontinued ABS 5671.0 in Nov-18.
1.
2. Clean Energy Council, Clean Energy Australia Report 2021.
3.
Estimated penetration for each lending vertical is based on Plenti’s share of estimated annual market loan originations. Renewable energy market size based on Plenti’s
estimate of OEM and installer-led point-of-sale finance provided to consumers.
ABS 5601.0 Table 27 LTM to Jun-20.
Contents
1
Loan originations ($m)
690
470
286
FY20
FY21
Q4 Run Rate
About this report
This 2021 Annual Report for Plenti Group Limited
(ACN 643 435 492) is issued on 25 May 2021.
Shareholders can request a printed copy of the
Annual Report, free of charge, by emailing or
writing to:
Julia Lefort
Level 5/14 Martin Place
SYDNEY NSW 2000
shareholders@plenti.com.au
Contents
FY21 highlights
Our journey
Using technology to be Australia’s best lender
Chairman’s message
CEO’s message
Our strategy
Operational overview
Stakeholders
Board & management
Directors' report
Financial statements
Additional information
2
4
5
6
7
8
9
14
18
20
45
87
2
FY21 highlights
Operational highlights
Automotive
lending growth
Renewable energy
lending growth
Personal
lending growth
Exceptional growth reflects
several years of planning
and investment
Strong growth reflects Plenti’s
leading loan offering and
introduction of BNPL 2
Strong H2 recovery after
reduced H1 lending due
to COVID-19
Loan originations ($m)
Loan originations ($m)
Loan originations ($m)
231
301%
on pcp1
57
33%
on pcp1
43
(2%)
on pcp1
91
69
125
99
87
57
58
46
23
FY19
FY19
FY20
FY21
FY20
FY19
FY19
FY20
FY21
FY20
H1
H2
H1
H2
H1
H2
FY19
FY20
FY21
21,825
number of loans funded in FY21
3,591
5-star reviews since establishment –
more than any other consumer lender
>560,000
customer profiles in Plenti’s ecosystem
28% on pcp 1
1 Previous corresponding period.
2 Buy-now-pay-later (BNPL).
Loan distribution by source (%)
(to 31 March)
Loan distribution by number of loans originated
15
14
29
42
Broker partners
Digital partners
Renewable energy vendors
Direct customers
Annual Report FY21
FY21 highlights
3
$470.4m
Originations
64% on pcp 1
$614.6m
Loan portfolio
61% on pcp 1
$53.1m
Revenue
28% on pcp 1
Financial highlights
Originations by year ($m)
64%
FY21 origination growth
470
286
230
FY19
FY20
FY21
Loan book by year
61%
3-year CAGR 2
615
381
253
FY19
FY20
FY21
1 Previous corresponding period.
2 Compound Annual Growth Rate.
4
Our journey
so far
Plenti officially launched to customers in late
2014 under the RateSetter brand operating as
a peer-to-peer lender, open to retail investors.
From initially funding only personal loans from
a single funding source, Plenti has since grown
rapidly across all parts of its business.
$250m
Loans funded
2018
CEFC2 approves up to
$100m
for renewable energy
lending in South
Australia (SA)
Appointed exclusive
administrator of Home
Battery Scheme in SA
Proprietary RAPID
credit engine launched
Investor ‘early access’
feature launched
Federation Asset
Management leads
$17.4m capital raise
2019
~20,000
registered investors
~45,000
borrowers
Direct-to-consumer
secured automotive
loan launched
Offshore support
functions launched
in Philippines and
Vietnam
$50m warehouse
funding facility
established for secured
automotive loans
$50m
Loans funded
2016
5,000
registered investors
Broker channel
distribution launched
Plenti 1st lender to
share CCR 1 data
2017
~10,000
registered investors
Renewable energy
lending launched –
$20m
CEFC 2 funding
Secured automotive
lending launched
Banks start funding
automotive loans
via platform
$10.5m
capital raising
$1m
Loans funded
2014
Plenti Lending
Platform established
for retail investors
2015
1,000
registered investors
Carsales invests
$10m
1 Comprehensive Credit Reporting (CCR) data.
2 Clean Energy Finance Corporation (CEFC).
3
Based on maximum total size of facility, not total size of facility; not committed funding.
$1.3bn+
Loans funded
2020
~23,000
registered investors
~58,000
borrowers since launch
Automotive warehouse
funding facility limit
increased to $150m
and again to $275m3
CEFC2 funding
arrangement
increased to
$147m
Appointed exclusive
administrator of
Empowering Homes
Program pilot by NSW
Government
Company rebranded as
Plenti
Listed on Australian
Securities Exchange
$100m
warehouse funding
facility established
for renewable and
personal loans
2021
BNPL renewable
energy finance
product launched
Automotive warehouse
funding facility limit
increased to
$350m 3
Automotive
Personal
Borrowers/Investors
Renewable Energy
Achievements
Annual Report FY21
Using technology to build
Australia’s best lender
Our technology is:
Our journey
5
Fast
Scalable
Efficient
Extensible
With our platform we deliver:
Superior
customer
experiences
Rich partner
integrations
Advanced
credit analytics
Fast
approvals
Our platform by numbers:
40+
onshore and offshore
engineers, product managers
and designers across 3 offices
99.99%
uptime over the past 12 months
5
deployments of
new products and
features per day
6
Chairman’s message
“ This is a business that was
founded to raise the bar in
Australia’s financial ecosystem,
and its underlying principles
are based on contributing to
a fairer and more efficient
financial system. ”
I'm delighted to present
Plenti's first annual report
as a listed company.
The financial services industry is
undergoing significant change.
Fiscal and monetary policy has
entered unchartered territories.
Large incumbents are shifting
their areas of focus. The regulatory
environment is rapidly evolving.
Digitisation is accelerating.
Arguably this industry change is most
significant in consumer finance, as it
has been coupled with significant shifts
in consumer expectations. Consumers
expect simpler experiences, faster
turnaround times, and better value.
Consumers are, quite rightly, holding
their service providers to a higher
standard. They are also voting with their
feet, as can be seen by the growth in
Plenti’s personal lending originations
in recent years. It is in this dynamic
environment that I have enjoyed joining
Plenti, first as a Director, and then as
Chairman of the Board.
Plenti has a track record of finding
ways to take advantage of industry
change – and in some instances helping
to create and accelerate that change
– as evidenced by the market share
it has taken and the new products
and features it has brought to market.
Plenti’s business model is defined by
digitisation and at its core sits Plenti’s
proprietary technology platform. It is
a business that is customer focused,
not only in words, but in actions too.
This is best illustrated by the numerous
industry awards it has received and
the fact that Plenti has more five-star
reviews than any other consumer lender
in Australia.
When I look forward, I am emboldened
by the opportunities presented
by ongoing industry changes, the
capabilities of Plenti’s founder-led
team and their execution plan for
building scale.
I commend Plenti’s founding team for
having anticipated the opportunities
arising in Australia’s lending markets
and for recognising the scale of the
opportunity. I also acknowledge the
strong and complementary talent the
founders have attracted to Plenti to
support them on their quest. Together,
the Plenti team has maintained
unwavering focus and executed their
plans effectively since they commenced
lending late in 2014. The successful
completion of the Company’s IPO in
September last year, during a global
pandemic no less, demonstrates the
strength of the foundations they have
laid for the business and its suitability for
today’s financial landscape.
This is a business that was founded
to raise the bar in Australia’s financial
ecosystem, and its underlying principles
are based on contributing to a fairer
and more efficient financial system. The
company’s ethos is broader yet, and
includes an environmental commitment
to help accelerate Australia’s solar
uptake, and a commitment to address
its gender diversity imbalance at all
levels of the business.
I’m proud to say, at Board level, we have
an industry-leading ratio of female to
male directors, and am heartened to
see Plenti’s executive leadership team
work diligently to improve this within
their leadership and broader team.
More importantly, I am proud to Chair
a business which genuinely wants
to make a difference for consumers,
employees and the broader community.
Plenti’s mission to be Australia’s best
lender rightly centres around delivering
unrivalled customer experiences
that traditional lenders, with legacy
technology, simply cannot – or choose
not to – match. By delivering these
experiences, it can continue to achieve
its growth ambitions, and create
long-term value for the business,
its customers, and its investors.
Looking forward, I have every
confidence in Plenti’s leadership group,
their capabilities, and their dedication
to delivering positive outcomes to all
Plenti stakeholders.
Mary Ploughman
Chairman
Annual Report FY21 CEO’s message
Chairman & CEO’s message
7
“
Plenti is the first Australian
fintech consumer lender to reach
$1 billion
in cumulative lending. ”
Delivering Plenti’s inaugural
full-year financial results as an
ASX-listed company is an exciting
milestone. It is with great pleasure
that I write these words.
It has been an extraordinary year for
Plenti. I cannot overstate the pride I
have in our business and our people for
successfully delivering exceptional results.
I feel privileged to have been at the helm
as Plenti has proven its resilience, while
continuing to build strong foundations
for continued future growth.
My co-founders Ben Milsom, Glenn
Riddell and I founded Plenti because
we believed that personal lending had
to change. It was slow, complicated, and
offered poor value. We thought that by
building a new kind of financial services
business with technology at its core, we
could offer customers fairer, faster loans
with better value than those available
from traditional lenders. Ever since,
we have worked relentlessly to build
Australia’s best lender and to achieve
our mission of bringing our customers’
big ideas to life. The foundations we
have put in place since our launch in
2014 have positioned us well to achieve
this mission.
We have three strategic priorities: to
establish market leadership, extend our
technological advantage, and optimise
our funding.
Continued strong growth will remain
our top priority. We want Plenti to play
a meaningful role in Australia’s financial
ecosystem. During the year, we became
Australia’s first fintech consumer lender
to reach $1 billion in cumulative lending
and, more significantly, we continue to
record exceptional growth across all our
lending verticals in our prime lending.
Our growth has been built on
outstanding customer experiences,
which in turn are underpinned by our
proprietary technology. During the year,
we made significant advancements in
our technology platform, which forms the
foundation of our customer proposition
– and is a determining factor in why
Plenti is increasingly a preferred provider
of finance – and is taking meaningful
market share from incumbents.
This year, we further diversified our
funding sources, ensuring we continue
to have access to competitively priced,
scalable, and flexible funding options.
To that end, during the period, we
successfully launched a new renewable
energy and personal loan warehouse
facility to complement our existing
funding platforms, which materially
reduced our cost of funding renewable
energy and personal loan originations.
Our strong credit performance was
achieved despite the challenges of
a broader economic environment
impacted by COVID-19. Our prime loan
portfolio sustained low levels of losses,
in part due to the credit quality of our
borrowers, but also due to our deliberate
shift towards lower-risk automotive
and renewable energy loans, which
now represent over half of our loan
portfolio. Importantly, the quality of our
loan portfolio was not compromised
by the substantial growth we achieved
throughout the year.
What we have accomplished over
the past 12 months can be attributed
to the dedication of Plenti’s people
– our ’Plentineers’. Our team now
comprises over 130 people in Australia
who, combined with additional teams
offshore, each delivered outstanding
efforts and focus throughout the year.
As our business evolves, our people
play an increasingly important role in
defining who we are, while bringing to
life the organisational values that inform
everything we do.
On behalf of the Board and Executive
Committee, I thank each Plentineer for
the results we’re so pleased to deliver
in this report.
In continuing the development of our
Company’s persona, significant work
was undertaken to relaunch the Plenti
brand. This completes the evolution of
our corporate identity, which started
with our name change just prior to our
establishment as a public company
and marks a meaningful and positive
milestone for our business.
An initial public offering requires one
to think deeply about what a business
is seeking to achieve. After much
consideration, our mission became clear
to our leadership group. Our mission is
to be Australia’s best lender. No caveats.
Looking forward, I’m tremendously
excited by what is ahead for Plenti as
we focus relentlessly on contributing
positively to the financial future of
Australia’s consumers, on delivering
technology-led growth, and on
delivering for our investors.
Thank you.
Daniel Foggo
CEO
8
Our strategy
A strategy intended to create a
long-term, sustainable business,
delivering strong returns.
Plenti will continue to execute on three
strategic priorities to achieve its mission
of bringing our customers’ big ideas
to life: establishing market leadership,
extending our technology advantage,
and optimising our funding structures.
Through leveraging our existing
foundations to build Australia’s best
lender, we are building a sustainable,
long-term business that delivers strong
returns for investors. Our proprietary
platform and capabilities are a key point
of difference in us achieving these goals.
Plenti’s first strategic priority – to
establish market leadership – reflects
our ambition to continue our rapid
origination growth, and to grow to
be the recognised leader in each of
our lending verticals as measured by
customer demand, loan portfolio size,
and consumer opinion. We believe our
progress will be supported by positive
structural changes that are underway in
the large automotive, renewable energy
and personal loan lending verticals,
which together represent more than
$45 billion of lending each year.
Plenti’s second strategic priority –
extending our technology advantage
– will facilitate continued rapid growth
by delivering faster, simpler loans to
our customers. Continual product
and technology improvements are a
growth driver for the business: during
the past year, these included substantial
improvements to the Plenti Partner
Portal to help facilitate best-in-class
loan application and settlement
experiences for referral partners;
the launch of an app for investors
on the Plenti Lending Platform; and
development of next-generation credit
decision and pricing models that
leverage machine-learning analysis
to accelerate decision times.
Our proprietary technology platform
is also the key driver of the efficiency
we are demonstrating in our business
model, delivering growth without
requiring proportionate increases in
cost as we scale.
Plenti’s final strategic priority is to
optimise funding structures. The
funding structures Plenti has put
into place reflect our commitment
to achieving funding diversity, in turn
helping to provide business resilience.
The business has established two
dedicated warehouse funding
facilities – one for automotive loans
and a second for renewable energy
and personal loans. These facilities are
complemented by a wholesale funding
structure, supported by investment
from banks and the Government’s Clean
Energy Finance Corporation, as well as
our retail investment platform, which
was Plenti’s original funding source at
establishment and has now attracted
over 23,500 investors.
Plenti intends to continue to build
resilience by diversifying and deepening
our funding platforms. In addition, we
intend to take action to continue to
reduce our cost of funding.
Plenti’s effective execution of strategy
can be seen in the operational results
that follow.
Strategic priorities
Establish market leadership
Extend technology advantage
Optimise funding structures
■ Establish prime lending
■ Continually invest in
■ Maintain funding diversity
leadership positions across
lending verticals – measured
by borrower demand,
loan portfolio size and
customer experience
technology platform to
innovate and deliver the
fastest and easiest loan
experiences to customers
■ Leverage technology
platform to continually
increase operating efficiency
and scalability
■ Continue to reduce funding
costs (interest rates)
Market
leadership
Technology
advantage
Funding
optimisation
Annual Report FY21 Operational overview
9
$33bn+
Annual market lending 1
Loan originations ($m)
231
301%
on pcp1
58
46
FY19
FY19
FY20
FY21
FY20
Closing loan book ($m)
264
218%
on pcp1
83
44
FY19
FY19
FY20
FY21
FY20
Operational overview
Automotive lending
Plenti’s proprietary technology provided
a significant market advantage,
delivering market-leading approval,
settlement and funding times across
all distribution channels, substantially
ahead of traditional lenders encumbered
with legacy technology.
Several product advances were delivered
over the year, including improvements
to the Plenti Partner Portal, the
introduction of loans with residual
payments, and broadened loan approval
criteria – most notably the funding of
caravans and vehicles with an extended
age at the end of loan term following
agreement by funders.
At the same time, Plenti successfully
upsized its warehouse funding capacity
several times during the period,
enabling the business to meet increased
customer demand in this large and
growing lending vertical.
Secured automotive lending became
Plenti’s largest and fastest-growing
vertical during the year, with loan
originations of $230.8 million, up 301%
on the prior year.
This growth in part reflects investment
in prior years to develop market-leading
automotive loan application
and back-end processes, build
distribution capabilities through both
digital and broker referral partners,
establish a highly effective sales team,
and secure cost-effective bank-led
warehouse funding.
This growth also reflects the significant
structural changes that the $33 billion
annual origination automotive finance
market is undergoing, with:
■ A number of traditional lenders
exiting direct participation in the
market given their inability to keep
up with the technology and staffing
demands of customers, creating an
opportunity for technology-enabled
lenders that are able to deliver
superior customer experiences to
fill the void
■ Changing customer preferences,
with the car-purchasing and
financing journey moving online
“Working with Plenti is always a smooth process. My BDM
is always ready to help find innovative solutions for my
clients and is available at all times to take my calls. Plenti
provides my clients with the funding they need at a
competitive speed and price.”
George Dib
Chief Executive Officer Amfin
1
Includes consumer and commercial lending segments. ABS 5601.0 Table 7 LTM to Jun-20, and ABS 5671.0
Table 9 LTM to Nov-18; ABS discontinued ABS 5671.0 in Nov-18.
10
Operational overview (continued)
Renewable energy finance
Plenti continued administration of
Australia’s two largest residential solar
and battery schemes throughout
the year: in South Australia, the
$100 million Home Battery Scheme,
and in New South Wales the pilot for the
Empowering Homes Program. These
programs contributed significantly
to loan origination growth across the
year and were reflective of Plenti’s
commitment to strategic partnerships
that can accelerate the uptake of
renewable energy in Australia. During
the year, Plenti established partnerships
with several large renewable energy
operators to further drive customer ease
of access to renewable energy finance.
Significantly, Plenti launched its first
buy-now-pay-later (BNPL) finance
offering after a successful pilot program
rolled out in the final quarter of the year,
generating an 80% increase in finance
applications from pilot partners when
compared to average demand in the
six months prior. The launch of the new
product, which has been positioned
to be the most transparent and most
customer-friendly in the market, follows
extensive regulator consideration
of the provision of BNPL finance in
renewable energy. The launch of the
new interest-free product complements
Plenti’s interest-bearing green loan,
providing customers with a full product
suite of finance options.
Renewable energy lending grew during
the year by 33% to $57 million in loan
originations. Market factors which
contributed to this performance include:
■ Strong growth in household solar
system uptake
■ Increasing battery adoption,
increasing the propensity for finance
to be required
■ Two meaningful state-sponsored
programs being underway, both
encouraging the adoption of
renewable energy systems
Demand for renewable energy
finance was impacted by the
pandemic-induced lockdowns during
the first half of the year; however,
over time these impacts were more
than offset by increased spending on
systems as Australians spent more time
at home and looked for ways to reduce
their energy spend, with a greater focus
on the home environment.
Partner network
700
renewable energy
equipment vendors
80%
in pilot‑partner finance
applications vs six months prior
“Working with Plenti provides us an enormous point of
difference, allowing us to offer tailored finance solutions
to meet and exceed our customer expectations. We
have worked with several finance companies over
the years; however, what Plenti offers in terms of its
technology, speed and innovation, means we have the
one-stop shop of finance offerings at our fingertips.”
James Strathdee
Director, Onepower
378k
Households installing
solar annually1
up 32% on pcp
multi $bn
Government programs
supporting uptake
Loan originations ($m)
57
33%
on pcp
43
23
FY19
FY19
FY20
FY21
FY20
Closing loan book ($m)
86
56%
on pcp
55
24
FY19
FY19
FY20
FY21
FY20
1
Clean Energy Council, Clean Energy Australia Report 2021.
Penetration for lending vertical is based on Plenti’s share of estimated annual market loan originations. Renewable energy vendor-led point-of-sale annual finance
market estimated by Plenti to be ~$800m, based on Plenti estimates of average system prices and levels of finance penetration.
Annual Report FY21
Operational overview
11
$12bn+
Annual market lending 1
Loan originations ($m)
(2%)
on pcp
91
69
125
99
87
57
H1
H2
H1
H2
H1
H2
FY19
FY20
FY21
Closing loan book ($m)
264
243
9%
on pcp
186
FY19
FY19
FY20
FY21
FY20
Partner network
7,601
accredited brokers
17
aggregators
Personal lending
Plenti believes the outlook for
continued growth in personal
lending remains strong. In recent years
technology-enabled lenders such as
Plenti have taken significant personal
loan market share from incumbent
lenders such as banks, as consumers
are increasingly seeking better value,
more convenient loans.
This can be seen in the big four’s
declining share of the personal loan
market in recent years. Since 2019, the
big four’s average market share has
dropped by more than 20% – and in
some instances by more than 30%.
The establishment of a new warehouse
facility in late 2020 was a key milestone
for Plenti, not only because it materially
reduced the cost of funding on new
renewable energy and personal
loan originations, but because it also
facilitated more flexible loan terms
(such as the introduction of longer loan
terms), significantly contributing to the
strong growth achieved in Q4.
Personal loan originations during
the year were $182 million compared
with $186 million in the year prior, a
result which was achieved despite
the material impacts of the COVID-19
pandemic on originations in Q1 and Q2.
Pleasingly, by December, personal loan
demand had returned to pre-pandemic
levels, and Q4 saw especially strong
demand, which was converted to record
personal loans being funded by Plenti in
that quarter.
Reflecting the different risk profile of
unsecured personal lending compared
with our other loan types, the onset
of COVID-19 drove an immediate and
significant reduction in our related
marketing spend in Q1 and Q2, especially
in the direct and digital acquisition
channel which accounted for 64% of
originations in the half-year prior to
the pandemic. This was accompanied
by a rapid, deliberate and responsible
tightening of our credit criteria in the
personal loan vertical in response to
increased uncertainty.
Credit criteria restrictions were
progressively unwound over the
remainder of the year as economic
conditions normalised, and – supported
by a resumption of our marketing
activity and a recovery in consumer
demand – Plenti funded a half-year
record $125 million in the second half
of the year.
Simon says yes to Plenti
Finance broker Simon Shi from
Topway Lending told us why he
chose Plenti personal loans for
his customers
View case study
1 ABS 5601.0 Table 27 LTM to Jun-20.
12
Operational overview (continued)
Prime loan portfolio with
industry-leading credit
performance
Credit performance
Since its establishment, Plenti has
focused on funding loan applicants
who would otherwise be able to
obtain finance from their bank. While
it can take time to establish a material
presence in this prime borrower
segment, once established it provides
the opportunity to build a business
of significant scale, as evidenced
by the origination growth Plenti is
now achieving.
This performance was underpinned
by Plenti’s robust credit processes,
with all key metrics improving despite
the challenging environment in the
first half due to the global pandemic.
Net credit losses represented 0.96% of
the $452 million average loan portfolio,
reflecting strong underlying borrower
characteristics supported by the robust
credit processes in place, Government
stimulus measures, and the strength
of the broader economic environment
in the second half of the year. Relatively
low net credit losses were also
supported by the shift of Plenti’s loan
portfolio towards secured automotive
and renewable energy loans, which
grew from 22% of the portfolio at the
start of the period to 43% at the end of
the period.
Since inception, Plenti has employed
risk-based pricing and credit
decisioning, helping to ensure loan
applicants are quoted accurate and
appropriate pricing for their credit
characteristics and loan purpose.
Refining credit decisioning and pricing
capabilities and increasing levels of
automation were key areas of focus
over the year.
In the last quarter, efforts were
directed towards developing
Plenti’s next generation credit and
decisioning models, with a focus on
injecting machine learning into credit
decisioning and pricing to help support
the delivery of faster fairer loans to
creditworthy customers.
The credit quality of Plenti’s loan
portfolio remained uncompromised
despite its substantial growth in loan
originations. This was shown in the
average weighted new-borrower
Equifax credit score of 820 at the end
of the period, compared to the portfolio
average of 785 at the end of the prior
year, and materially above most peers
including the big four.
90+ days arrears were 0.31% of the loan
portfolio at year end, down 14% from
31st March 2020. The proportion
of borrowers who sought to enter
loan deferrals or financial hardship
arrangements was substantially below
industry averages.
Across the whole portfolio, loans
under such arrangements peaked
in May 2020 at 4.17% of outstanding
balances. Plenti sought to support
such borrowers by employing a flexible
approach to repayment arrangements
where a borrower had experienced a
change in circumstances that negatively
impacted their ability to meet their
loan obligations.
Pleasingly, by the end of the period,
the percentage of the portfolio where
underlying borrowers were under
such an arrangement had reduced to
0.21%, below pre-pandemic levels.
90+ days arrears1
1.0%
0.8%
0.6%
0.4%
0.2%
0.0%
COVID-19 impacts
8
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8
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Average credit score1
850
800
750
700
650
600
Indicative big four and
prime fintech lenders2
8
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S
8
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9
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2
90+ days arrears calculated as total value of loans over 90 days in arrears but not yet written off divided by loan portfolio value.
Indicative big four and prime fintech lenders represents median credit score for fixed term personal loans, Equifax Consumer Update – November 2020.
Annual Report FY21 Operational overview
13
The Plenti Lending Platform
remained an important contributor
to loan funding during the year, and
continued to provide retail investors
with the opportunity to invest in
consumer credit. Retaining this flexible
funding source remains a priority for
the Company.
The Plenti Wholesale Lending Platform,
which was initially established by the
Company to fund secured automotive
loans (prior to the secured automotive
warehouse facility being put in place),
was exclusively used to deploy Clean
Energy Finance Corporation (CEFC)
funds in support of Plenti’s delivery of
the New South Wales Government’s
Empowering Homes Program pilot.
Deep funding with reducing
cost of funds
Funding
The depth and diversity of Plenti’s
loan funding arrangements represent
a key strategic strength, supporting
both the Company’s resilience and
its ability to innovate and launch new
loan products.
Plenti initially funded loans
exclusively via the Plenti Lending
Platform, the foundation of its
retail investor-focused marketplace
lending model. Plenti subsequently
diversified its funding base to include
institutional and Government
investors, and then in late 2019,
commenced its warehouse facility
and securitisation program with
the establishment of a secured
automotive loan warehouse facility.
A major milestone during the year
was the establishment of Plenti’s
second warehouse facility, to fund
renewable energy and personal loans.
The Company commenced funding
loans from this facility in December,
substantially reducing its cost of
funding on new loan originations,
thereby materially increasing the
economic contribution of each new
loan funded. The establishment of
this facility also gave Plenti the ability
to introduce additional loan features,
which contributed to its loan origination
growth in the fourth quarter.
Importantly, the newer warehouse
facility further enabled Plenti to deliver
on its commitment to help advance
Australia’s clean energy future, with
5,897 renewable energy loans funded
during the period, equating to a total
carbon abatement of some 67,403
tonnes of C02 over the lifespan of the
systems installed.
Plenti’s first warehouse funding facility
– its automotive warehouse which
was established in the prior year – was
upsized three times during the period,
reflecting both the ongoing support
from the Company’s high-quality
institutional funders and increased
customer demand. The increases
saw capacity in this facility grow from
$50 million to $350 million during
the period.
Plenti’s total warehouse facility
funding capacity at year end was
$450 million, with more than
$160 million in headroom.
We evidenced the diversity, depth and resilience
of our funding platforms.
Warehouse funding
Plenti Lending Platform
Description
Description
■ Warehouse and securitisation
program, which commenced
in December 2019
FY21 advancements
■ Automotive warehouse
upsized several times, from
$50m to $350m
■ Established new $100m
renewable energy and
personal lending warehouse
■ 23,500+ registered retail,
institutional and government
investors funding personal
and renewable energy loans
FY21 advancements
■ Attracted 3,323 new investors
■ Utilised to introduce BNPL
finance to renewable energy
merchant partners
■ Substantial reduction in cost
of funds
Plenti Wholesale Lending
Platform
Description
■ Flexible funding platform
available to wholesale or
sophisticated investors
to fund a diverse range
of loans
FY21 advancements
■ Attracted the Government’s
CEFC as a funder
■ Commenced funding
interest-free loans
which form part of NSW
Empowering Homes
Program pilot
14
Stakeholders
Plenti is committed to
creating a long-term,
sustainable business that
creates value for its people,
customers, investors and
broader community.
Since our earliest days,
our commercial objectives
have been guided by a
foundation of responsibility
and a desire to contribute
positively to Australia’s
financial system.
Our founders were motivated by a
desire to create a business that could
provide borrowers and investors
with the opportunity to participate
in an ecosystem where there would
be fair and equal access, and better
value for everyone. Those principles
informed the business from the outset:
from Plenti’s business model, to the
products we offer, to the way in which
we delivered them, through to how we
undertake business with our partners
and stakeholders.
Our vision
Faster, fairer
loans through
smart technology
Our desire to contribute positively to
our financial system has hopefully been
visible since Plenti’s launch, with notable
Company initiatives, including:
■ Being a pioneer in providing retail
investors with access to the significant
asset class of consumer loans, by
establishing an ASIC-regulated
marketplace investment platform
where customers can invest with
as little as $10;
■ Being the first lender to allow
borrowers to view an indicative loan
interest rate based on their credit
file, without negatively impacting
their bureau credit score – thereby
helping consumers to ‘shop around’
for the best deal and support greater
competition in the marketplace;
■ Being the first lender to regularly
release its loan book publicly,
allowing investors and regulators
to fully understand its business
activities and credit performance,
bringing a new level of transparency
to lending in Australia;
■ Being the first lender to share
comprehensive credit data with
other lenders, following sustained
advocacy by the Company for the
comprehensive credit reporting
regime to be adopted and then
mandated in Australia, which
has helped to introduce greater
competition to loan markets;
■ Creating a team that specialises in
providing cost-effective finance to
cover legal fees (via a personal loan,
secured over property) for people
who are going through divorce
and who are often deprived of the
financial resources they would
usually have access to, to help them
achieve the settlement to which they
are entitled; and
■ Being the delivery partner for a
world-class home-battery purchase
subsidy program on behalf of the
Government of South Australia, to
help encourage the adoption of
renewable energy systems and help
support our natural environment.
Equally, our ambitions to achieve
significant annual growth are balanced
by the seriousness with which we take
the responsibility of being custodians
of other people’s capital, whether they
be our retail or institutional investors,
our warehouse facility funders or our
equity investors. This ethos is perhaps
most evident in our approach to credit
risk. This is reflected by the strength of
our average borrower characteristics,
the relatively low historical credit losses,
and our ongoing shift towards more
predictable automotive and renewable
energy loans.
Our mission
Building Australia’s
best lender
Annual Report FY21 Our purpose
Stakeholders
15
Bringing people’s
big ideas to life
Our Values
Be the
best
We’re a high performance
team with ideas that make
a difference.
Do what’s
right
Our decisions matter.
Make it
happen
We keep it simple, do it
together, and get the
job done.
Think like a
customer
We never forget that our
customers are what it’s
all about.
We believe our focus on adopting a
long-term, sustainable approach sets
us in good stead to continue building
a business that can create value for all
stakeholders. Moreover, we believe this
approach is the right thing to do.
Our principles and cultural values
are the foundations of Plenti and are
complemented by the additional
governance frameworks brought by
our Australian financial services licence
and our recent listing on the Australian
Securities Exchange. Our Board
supports management in its efforts to
build sustainable value for shareholders,
while protecting our assets and
reputation and seeking to ensure our
Directors, officers and staff operate
within an effective and appropriate
governance structure.
We reached important organisational
milestones in the past 12 months –
some commercial, such as reaching
$1 billion in cumulative loans; some
structural, such as our listing on the
ASX; and others cultural, like our change
of name executed just prior. These
milestones created a natural time for
reflection and assessment about who
Plenti is and what we stand for, and
accordingly we recently re-articulated
our organisational values to encompass
our beliefs, not only for our people, but
for all stakeholders.
These values, in turn, each describe
the qualities that are most important
to us as a business, how we want
our own people to behave, and the
benefits we aim to deliver to all our
stakeholders. Their foundation is, quite
literally, do what’s right – and this is our
organisational commitment.
16
Stakeholders (continued)
Our people
We are a modern workplace defined by flexibility, mutual respect and
a commitment to success. We actively contribute to the well-being
of our team with a range of wellness activities and benefits, including
a People Experience Committee of more than 15 volunteers who are
empowered to leverage survey feedback and deliver initiatives aimed at
creating a best-in-class experience; Employee Assistance Program (EAP);
employer-paid parental leave, paid volunteering leave and training budgets.
Our team’s engagement score was 84% at year end, as measured through
regular pulse surveys undertaken across the business. This compares to
an industry standard of 73% and reflects Plenti’s ongoing commitment
to driving people engagement.
84%
engagement
compared with 73%
industry average
Plenti operations
Our commitment:
to continually improve our gender diversity and remove any
gender pay gap.
Our partners
Plenti’s broker and renewable energy
partner network is a critical pillar
our business, with more than 70% of
new borrowers over the year accessing
our loans via these partners.
Each partner in our network of over
11,000 brokers, aggregators, installers,
vendors and retailers, is as much a core
customer as is each of our individual
borrowers. Our priority is to help each
of them grow and improve their own
business by providing them with
market-leading products that meet
their clients’ needs.
Our commitment:
to continually deliver market-leading
solutions to our partners to help
grow their businesses.
Our borrowers
Plenti strives to provide its borrowers with better value
and a better borrowing experience compared with peers.
We pride ourselves on delivering a superior customer
experience that includes personalised, risk-adjusted rates;
flexible loan terms and efficient indicative quotes; simple
and transparent terms; and rapid application assessment
and funds settlement.
Our responsible lending approach means we assess
applicant creditworthiness to ensure any shared risk is
minimised and priced appropriately. We take a proactive
approach to managing borrowers who are experiencing
financial hardship and work closely with them to understand
the nature of their financial circumstances, in the interest of
getting them back on track with their loan repayments.
We are committed to lending responsibly. We take
a considered approach to attracting and approving
creditworthy borrowers and continually review our
credit-risk management framework. The framework
comprises credit risk policies; credit policy rules; our
responsible lending guidelines; our automated credit
decisioning processes and credit pricing scorecards
and models.
Our debt consolidation lending, in particular, has delivered
significant benefits to those borrowers in our personal
lending vertical, who have collectively been able to save
an estimated $35.8 million in cumulative interest simply
by merging disparate debts and associated fees and
charges into one good-value loan.
Our commitment to our customers, however, goes beyond
the value proposition described here and encompasses a
genuine belief that they underpin our reason for being.
Our commitment:
to support a fairer, more efficient
financial system for all.
estimated
$35.8m borrower savings in
cumulative interest
ManillaBrisbaneSydneyMelbourneAdelaideHo Chi MinhAnnual Report FY21 Stakeholders
17
Our environment
Our renewable energy lending most demonstrably reflects our
commitment to accelerate the uptake of solar energy systems, and
more broadly, to make a positive contribution to Australia’s clean energy
future. Our important strategic government partnerships in New South
Wales and South Australia further reinforce this position and our intention
to make a difference in this all-important market.
Total renewable loans funded since establishment of this vertical were
at $130 million by the end of the year, reducing C02 emission by almost
130,000 tonnes. This yardstick marks just the beginning of our work in
the clean energy sector, with committed efforts underway to grow and
broaden the product offer in this lending vertical.
In automotive lending, much work during the year was completed in
the investigation of developing a product dedicated to financing electric
vehicles, thereby aligning our environmental considerations with our
largest lending vertical.
$130.3m
reducing C02 emission by
>129,600t
Our commitment:
to contribute to Australia’s clean energy future through driving
adoption of solar, home battery and electrical vehicles.
Providing a superior experience sits
at the foundation of our engagement
with our partners. This starts with the
technology and automated systems
that we provide them with, either
through integrating with their own
technology systems or through our
industry-leading Partner Portal,
which provides them with the tools
to better serve their clients. However,
there is a substantial human element
relevant to each partnership.
Accordingly, we maintain dedicated
business development, sales and
support teams to work with each
partner and to, amongst other
things, ensure we are easy to work
with and can deliver the finance
solutions that will help drive their
business growth.
>70%
new borrowers
Our investors
Plenti’s diverse loan portfolio funding base encompasses
retail, institutional, bank and government funding partners
through the Plenti Lending Platform and the Plenti
Wholesale Lending Platform, as well as senior debt and
mezzanine funding partners through the Company’s two
warehouse facilities.
The Provision Fund exists to provide a layer of protection,
comprising cash held on trust for the benefit of investors. To
date, investors in the Plenti Lending Platform have earned
$61.3 million in interest, and the Provision Fund has helped
ensure 100% of capital and interest has been paid to Plenti
Lending Platform investors.
Our deliberate efforts to attract a diverse range of funding
partners has been in part driven by a desire to ensure we
have flexible, scalable and low-cost funding sources, and
to ensure Plenti is resilient in the event of any unforeseen
changes in the funding environment.
Plenti’s origins as a peer-to-peer lender through
establishing the Plenti Lending Platform has enabled
retail investors to invest in consumer loans – an asset class
that had traditionally been restricted to a relatively small
number of larger institutional investors such as banks.
The Plenti Lending Platform continues to deliver attractive
returns to investors, who benefit from the protection of
a registered managed investment scheme structure.
Institutional investors can access multiple loan verticals
through our wholesale and warehouse funding facilities,
thereby holding exposure to the substantial consumer
lending asset class without having to build their own
distribution capabilities, technology platform or manage
customer requirements. As major banks continue shifting
towards providing their customers with a narrower suite
of products and services, they are increasingly indirectly
supporting the consumer lending asset class through their
investments in businesses like Plenti.
Similarly, we act as a delivery partner for governments who
seek to drive programs to accelerate solar energy uptake,
using our existing capabilities and established partner
networks to execute such programs on their behalf.
Our commitment:
to achieve further scale, providing investors
with an increasingly efficient investment
platform with stable returns.
$61.3m
cumulative interest earned
by investors in Plenti
Lending Platform
18
Board & management
Board of Directors
Appearing above from left to right:
Mary Ploughman
Chairman and Independent Non-Executive Director
Susan Forrester AM
Non-Executive Director
Susan was appointed as a Non-Executive Director in
October 2020. Susan has extensive commercial, strategic and
governance experience across a range of industries, including
technology and financial services. Susan is a qualified lawyer,
has an EMBA from the Melbourne Business School and is a
Fellow and Councillor of the Australian Institute of Company
Directors. Susan currently serves as Non-Executive Director
of G8 Education Limited and Over the Wire Ltd, and as the
Non-Executive Chair of Jumbo Interactive Limited. She has
previously served as Non-Executive Director of Xenith IP Group
Limited and Viva Leisure Limited, and was Non-Executive
Chair of National Veterinary Care Ltd. Susan was awarded a
Member in the General Division of the Order of Australian
for significant services to business through her strategic and
governance roles and for her advocacy for women.
Daniel Foggo
Executive Director and Chief Executive Officer
Daniel founded Plenti and has acted as CEO since its inception.
Prior to that, he worked in investment banking for over a
decade, including at Rothschild in London and at Barclays in
Sydney. Daniel was a co-founding director of PartPay, a
buy-now-pay-later business, which was acquired by Zip Co
Limited in 2019. He has been recognised for his achievements
in the fintech industry, being named the Fintech Leader of
the Year at the inaugural Australian Fintech Awards in 2016
and Fintech Entrepreneur of the Year at the Australian Fintech
Business Awards in 2017. Daniel holds a Bachelor of Commerce,
Economics (Honours) and a Master of Business, Finance
(Distinction) from the University of Otago.
Mary was appointed independent Non-Executive Chairman in
July 2020. Mary brings 30 years of leadership, financial services
(including the non-bank sector), capital markets, securitisation,
mergers & acquisition, governance and risk management
experience on a range of financial institutions, infrastructure
and not-for-profit boards. Mary served as a Non-Executive
Director of Sydney Motorway, and as Deputy Chairman of
the Australian Securitisation Forum. Mary is a former CEO
of Resimac Group Ltd. Before joining Resimac, Mary worked
at Price Waterhouse Coopers and Macquarie Bank. Mary
currently serves as Non-Executive Director on Prospa Group
Ltd and TF Global Markets (Aust) Ltd Boards. Mary holds a
Bachelor of Economics from The University of Sydney, is an
Associate of the Securities Institute of Australia, a Graduate
Member of the Australian Institute of Company Directors and
is a Fellow of the Australian Securitisation Forum.
Peter Behrens
Non-Executive Director
Peter currently serves as Chief Commercial Officer and
Director of Retail Money Market Ltd (RMML). Peter has
20 years’ experience in law, financial services and growth
companies with Ashurst, Royal Bank of Scotland plc,
Laxfield Capital, RMML and Metro Bank plc. Peter previously
served as a non-executive director of George Banco Limited.
Martin Dalgleish
Independent Non-Executive Director
Martin currently serves as an Independent Non-Executive
Director of KPMG Australia and Michael Cassel Group
Holdings Pty Ltd, Partner at Asia Principal Capital Pty Limited,
Investment Partner at Morpheus Ventures, Investment
Partner at HEAL Partners, and Chairman of each of ActivePipe
Group Pty Ltd, Hometime Group Pty Ltd and Realtair Pty Ltd.
Martin has over 30 years’ executive experience in technology,
consumer, telecommunications and media with Publishing and
Broadcasting Limited (PBL), Optus, PepsiCo and IBM Australia.
Martin has previously served as a Non-Executive Director or
Alternate Director at many leading media and technology
companies, including PBL Media, Ticketek, Hoyts, FOXTEL,
Fox Sports Australia, Mediaworks (NZ), SEEK, and Carsales.
Annual Report FY21 Executive Committee
Board & management
19
Appearing above from left to right:
Glenn Riddell
Chief Operating Officer
Glenn joined Plenti as a co-founder and Chief Operating
Officer in April 2014. Glenn has broad experience in
building and advising disruptive finance platforms.
He has been involved in the retail lending industry since
2007. Prior to joining Plenti, Glenn was a principal at Boston
Partners providing advisory services in digital strategy,
marketing and online product development. Glenn holds
a Bachelor of Commerce and a Master of Commerce
(First Class Honours) in Economics.
Ben Milsom
Chief Commercial Officer
Ben joined Plenti as a co-founder in May 2014 and in April 2018
was appointed to his current position as Chief Commercial
Officer responsible for key commercial relationships and,
until May 2021, Group legal and compliance. Ben has diverse
experience in financial services and online strategy, and
is well-practised in high-growth digital ventures. Prior
to joining Plenti, Ben was a principal at Boston Partners
providing advisory services in digital strategy, marketing and
online product development. Ben holds a Bachelor of Laws
(Honours) and a Bachelor of Engineering (First Class Honours)
in Computer Systems. Ben is admitted as a Barrister and
Solicitor of the High Court of New Zealand.
Simon Cordell
Chief Risk Officer
Simon joined Plenti in April 2016 and was appointed to his
current position as Chief Risk Officer in April 2016. Prior to
joining Plenti, Simon was Head of Consumer Risk and then
Head of Small Business Risk at American Express Australia,
responsible for the full credit life cycle from origination
through to collections. Simon holds a Bachelor of Science.
Daniel Foggo
Executive Director and Chief Executive Officer
See previous page 'Board of Directors'.
Georgina Koch
General Counsel and Company Secretary
Georgina joined Plenti in April 2021 in her current position
as General Counsel and Company Secretary. Prior to joining
Plenti, Georgina was the General Counsel and Company
Secretary at Ampol Limited, an ASX50 company. Georgina
has over 20 years’ legal experience advising on mergers and
acquisitions, commercial, competition and corporate legal
issues, and held senior roles at the Commonwealth Bank
and Clayton Utz prior to Ampol. Georgina holds a Bachelor of
Economics (Social Sciences), a Bachelor of Laws (First Class
Honours) and a Masters in Labour Law and Relations from the
University of Sydney. Georgina is a Graduate of the Australian
Institute of Company Directors and is admitted as a solicitor
to the Supreme Court of NSW.
Miles Drury
Chief Financial Officer
Miles joined Plenti and was appointed to his current position
as Chief Financial Officer (CFO) in March 2020. Prior to joining
Plenti, Miles served as a senior executive with Caltex Australia
from 2015 to 2019, initially as General Manager – Strategy, and
then as Chief Financial Officer of Caltex’s Retail business.
Prior to Caltex, Miles worked in investment banking at
UBS for 14 years. Miles holds a Bachelor of Commerce
and a Bachelor of Law (First Class Honours).
20
Directors’ report
31 March 2021
Contents
Directors’ report
Remuneration report
Auditor’s independence declaration
21
32
44
“ Plenti is our go to lender when we want
quick, easy to understand product and
well‑priced car loans for our customers.
They are miles ahead in terms of technology; they have the simplest
portal to use and it takes 5 minutes to fully complete an application.
We have had multiple customer scenarios where we needed to
provide an approval and settlement same day – which is unheard
of in the secured car loan space – and Plenti gives us this ability. ”
Zaheer Jappie, Founder
Car Clarity
Annual Report FY21 21
The directors present their report, together with the financial
statements, on the consolidated entity (referred to hereafter
as the ‘Group’) consisting of Plenti Group Limited (referred
to hereafter as the ‘Company’ or ‘parent entity’) and the
entities it controlled at the end of, or during, the year ended
31 March 2021.
Directors
The following persons were appointed directors of Plenti
Group Limited on 12 August 2020 and remained a director
during the whole of the financial year and up to the date of
this report, unless otherwise stated:
Mary Ploughman (Chairman)
Daniel Foggo
Susan Forrester AM (appointed 30 October 2020)
Martin Dalgleish
Peter Behrens
Principal activities
Plenti is a fintech lending and investment business providing
faster, fairer consumer loans through smart technology.
Plenti provides creditworthy borrowers with automotive,
renewable energy and personal loans, delivered by
proprietary technology. Additionally, Plenti seeks to provide
investors with attractive, stable returns via investing in the
established asset class of consumer loans. Plenti operates
primarily in Australia.
During the financial year, the principal activities continued
to be the provision of automotive, renewable energy and
personal loans, the operation of schemes to facilitate
investment opportunities for investors (through the Plenti
Lending Platform and Plenti Wholesale Lending Platform),
and the funding of loans via the Group’s warehouse and
securitisation program.
Dividends
There were no dividends paid, recommended or declared
during the current or previous financial year.
Review of operations
During the year ended 31 March 2021, Plenti achieved
several important milestones and delivered strong business
results including:
■ Record loan originations of $470 million, up 64%
year‑on‑year (YOY)
■ Record loan portfolio of $615 million, up 61% YOY
■ Record revenue of $53.1 million, up 28% YOY
■ Delivered significant technology‑led advancements in
customer experience, credit decisioning and pricing,
partner integrations, and introduced an investor app and
BNPL finance for renewable energy customers
■ Delivered a significant reduction in funding costs and
expanded automotive warehouse facility limit from
$50 million to $350 million, and established new renewable
energy and personal loan warehouse facility
■ Showed operating leverage of business model, with
material reduction in costs per dollar funded
■ Delivered market‑leading credit performance with 0.96%
net loss rate and low 90+ day arrears of 0.31% at period end
■ Raised $55m via an initial public offering (IPO) in
September 2020
For the year ended 31 March 2021, the Group reported a
statutory net loss after tax of $15,092,000 (2020: $16,232,000),
a 7% improvement on the prior year.
The statutory results were impacted by several material non‑
recurring items, including costs relating to the IPO of Plenti
shares on the ASX and one‑off benefits during the COVID‑19
period, primarily government subsidy payments. The pro
forma results for the year provide a more meaningful basis
to report on business performance. The pro forma analysis
included in this report is presented on the same basis as in
Plenti’s Prospectus, dated 21 August 2020.
On a pro forma basis, for the year ended 31 March 2021,
the Group reported net loss after tax of $11,910,000 (2020:
$16,447,000), an improvement of 28% on the prior year.
Earnings per share (EPS) of (10.06) cents on a statutory basis
improved 21% on the prior year of (12.68) cents. This reflected
the reduction in statutory net loss after tax and the higher
number of shares on issue following the IPO of Plenti.
22
Directors’ report
The table below sets out the pro forma financial results for the year compared to the prior year pro forma results, as presented in
the Prospectus.
Interest revenue
Other income
Total revenue before transaction costs
Transaction costs
Funding costs
Expense passed to unitholders
Loan impairment expense
Sales and marketing expense
Product development expense
General and administrative expense
Depreciation and amortisation
Total expenses
Net loss before income tax expense
Notes:
1. Pro forma adjustments have not been audited.
2021
$’000
50,744
2,381
53,125
(2,736)
(25,116)
(37)
(7,312)
(9,660)
(5,521)
(13,908)
(745)
2020
$’000
39,840
1,672
41,512
(1,582)
(20,687)
680
(10,716)
(10,112)
(4,653)
(10,184)
(705)
(62,299)
(56,377)
(11,910)
(16,447)
Change
$’000
10,904
709
11,613
(1,154)
(4,429)
(717)
3,404
452
(868)
(3,724)
(40)
(5,922)
4,537
Change
%
27%
42%
28%
73%
21%
nm
(32%)
(4%)
19%
37%
6%
11%
(28%)
2. A reconciliation to the statutory result and details of the pro forma adjustments is set out on pages 27 and 28 under ‘Statutory to pro forma reconciliation’ and
‘Summary of pro forma adjustments’.
Total revenue before transaction costs increased 28% in the year, with interest revenue increasing by 27% and other income
increasing from $1.6 million in the prior year to $2.4 million. Interest revenue growth was driven by the substantial increase in
the size of the Group’s loan portfolio during the period, which was a result of the record level of loans originations achieved. Total
origination growth was driven primarily by strong growth in automotive lending, as Plenti’s investment in building a highly
competitive automotive finance offering delivered results. Renewable energy lending also continued to grow solidly in the year.
Personal lending was flat year‑on‑year with a substantial decline in the first half of the year due to the impact of the COVID‑19
pandemic and a strong recovery in the second half as the Group successfully executed strategies to grow market share.
Funding costs increased by 21% as a result of the larger loan portfolio size, while loan impairment expenses fell 32%, reflecting a
strong credit performance in the period. The favourable credit result reflected the strong underlying borrower characteristics
of the Group’s loan portfolio and Government support measures through the COVID‑19 period, including JobKeeper and the
superannuation access scheme.
On a pro forma basis, sales and marketing expense fell 4% to $9.7 million, largely reflecting lower digital marketing spend through
the initial months of the COVID‑19 pandemic. Product development expense increased 19% to $5.5 million as Plenti continued to
invest in its technology platform, while general and administrative expenses increased 37% to $13.9 million. Approximately half
the increase was driven by higher credit‑processing and loan‑servicing costs on higher loan volumes and half by investment in
salaries and incentives to drive business growth.
Loan originations and portfolio
Originations ($’000)
Loan portfolio (period end) ($’000)
Loan portfolio (average) ($’000)
Average monthly amortisation rate (%)
Average term of originations (months)
Number of originations
Average value of loan originations
2021
2020
Change %
470,387
286,444
614,635
380,882
452,239
310,849
4.3
62
21,799
21,578
4.4
53
17,913
15,991
64%
61%
46%
(2)%
18%
22%
35%
Annual Report FY21 23
Loan origination volumes of $470 million for the year, an increase of 64% on the prior year, saw the total loan portfolio grow to
$615 million at 31 March 2021. This represented a 61% increase on the loan portfolio at 31 March 2020.
Growth in the overall loan portfolio is also impacted by the loan amortisation rate (rate at which loans pay back). Overall, the
rate decreased slightly in FY21, but there was substantial variance between the first half and second half. In the first half, the
amortisation rate was 4.8% per month as borrowers accelerated loan paydown in the face of the uncertainty caused by the
COVID‑19 pandemic. In the second half, loan amortisation reduced to a historically low rate of 4.0% per month, reflecting the
increased proportion of lending in the automotive and renewable channels, which tend to have longer loan terms (average loan
term increased 18% in the period) and for which borrower repayments are more closely aligned to the contract repayment profile.
Growth was achieved in number of loan originations, and the average loan amount also increased. Growth in automotive loan
originations, which tend to have higher average loan sizes, was the primary driver of the 35% increase in average loan amount.
Loan origination by channel
Automotive originations ($’000)
Renewable originations ($’000)
Personal loan originations ($’000)
2021
2020
Change %
230,827
57,139
57,563
42,984
182,420
185,896
301%
33%
(2%)
Automotive originations increased significantly over the period as the benefits of several years of investment in building a leading
automotive loan offering came to fruition. The increase in automotive lending was supported by increased funding capacity from
the Group’s secured automotive loan warehouse facility.
Renewable energy finance originations also grew substantially over the period despite COVID‑19 related restrictions during the
year. Growth was particularly strong in New South Wales and Queensland. In early 2021, Plenti also launched an interest‑free or
buy‑now‑pay‑later offering in the renewable energy market. Uptake of this offering by installer partners also supported growth in
this channel towards the end of the financial year.
Personal loan originations decreased to $56.1 million in the first half of FY21 due to a reduction in market demand with the onset
of the COVID‑19 pandemic as well as the Group’s intentional tightening of lending standards and reduced marketing investment
in response to uncertain market conditions. The second half of the year saw a significant rebound in activity with $122.6 million
of personal loan originations, an increase of 118% on the previous half and 27% on the comparable period in FY20. This was driven
by a number of factors including improving market demand, broader use and comfort with digital channels by consumers,
increased marketing investment and increased efficiency of customer acquisition. In addition, the Group was able to increase
personal loan originations after it commenced funding loans from its newly established renewable energy and personal loan
warehouse facility, which allowed the Group to offer loan terms of up to seven years rather than the previous five year maximum.
Product margin and funding costs
Average interest rate (%)
Average funding rate (%)
Funding debt (period end) ($’000)
Funding debt (average) ($’000)
2021
11.2
5.7
587,313
438,010
2020
12.8
6.8
372,259
305,551
Interest revenue in the Group’s financial statements represents interest and origination fees on loans funded by Plenti, treated
under the effective interest rate method, as well as interest on cash deposits. The average interest rate is calculated by dividing
interest revenue by the average loan portfolio for the period.
The average interest rate reduced to 11.2% in the year, down from 12.8% in the prior year. This reduction primarily reflected the
increased proportion of automotive and renewable energy loans in the loan portfolio, which typically earn lower interest rates
than personal loans, reflecting their relatively strong expected credit performance and the longer term of the loans.
The average funding rate paid by the Group reduced from 6.8% to 5.7%, largely reflecting the increase in funding from the Group’s
warehouse facilities during the period. From February 2020, secured automotive loan originations have been predominantly
funded from the Group’s secured automotive loan warehouse facility, and the majority of renewable and personal loan originations
have been funded from the renewable energy and personal loan warehouse since December 2020. These facilities carry materially
lower average funding costs than the Group’s prior funding structures. Since introduction of warehouse facility for personal and
renewable loans, the Group has also seen the average cost of funding loans via the Plenti Lending Platform reduce meaningfully.
24
Directors’ report
Credit performance
Loan impairment – net charge off ($’000)
Loan impairment – provision movement ($’000)
Provision rate (%)
Net charge off to average loan portfolio (%)
2021
4,350
2,961
2.1
1.0
2020
7,264
3,452
2.6
2.3
Total loan impairment expense decreased 32% compared with the prior year, with the net charge off rate falling from 2.3% to 1.0%.
The reduced loss rate was primarily due to two factors. The first was the shift in the Group’s loan portfolio towards automotive
and renewable loans which typically exhibit stronger credit characteristics and lower average loss rates than personal loans. The
second was benign economy‑wide credit conditions resulting from government and regulator actions relating to the COVID‑19
pandemic, such as the JobKeeper program, early access to superannuation and borrowers being able to obtain loan deferrals on
larger credit obligations such as home loans from other lenders.
The Group’s expected credit loss (ECL) provision at 31 March 2021 was $12.9 million, representing 2.1% of the total loan portfolio.
This compares with $9.9 million, or 2.6% of the loan portfolio, at 31 March 2020. The ECL value was impacted by three main factors.
The first was the increase in the total value of the Group’s loan portfolio which, all other things being equal, would increase the
value of the ECL. This was offset by the structural shift in the loan portfolio to lower risk automotive and renewable loans, which
attract lower provision rates. The third factor was economic overlays applied by management to adjust for macroeconomic
factors not accounted for in the base provisioning model. Management reduced the economic overlay adjustment compared
with the position at 31 March 2020, given the lower level of general risk and uncertainty in the economy given Australia has
demonstrated an ability to manage the COVID‑19 pandemic, and unemployment levels being significantly lower at period end
than previously anticipated. Management maintained a specific $1.2 million provision to account for the risk of “deferred losses”
from the prior year, as JobKeeper support is removed from the economy, banks wind back loan deferrals for customers, and
more normal insolvency and bankruptcy processes return.
Pro forma operating metrics
Overall cost‑to‑income ratio
Sales and marketing expense to revenue ratio
Product development expense to revenue ratio
General and administrative expense to revenue ratio
Overall cost to originations ratio 1
2021
54.8%
18.2%
10.4%
26.2%
5.8%
2020
60.1%
24.4%
11.2%
24.5%
8.3%
Note:
1. The ratio as presented excludes the period from March 2020 to May 2020 as the impact of COVID-19 materially distorts the numbers. Including the full 2021 and
2020 periods the relevant ratios would be 6.2% (2021) and 8.7% (2020).
Plenti’s total operating cost‑to‑income ratio, on a pro forma basis, reduced to 54.8% in the year, down from 60.1% in the prior year. This
reflected both operating leverage in the business as revenue grew as well as reduced investment during the period due to COVID‑19.
Sales and marketing expense decreased to $9.7 million in the year from $10.1 million in the prior year. This was primarily driven
by a $0.7 million reduction in marketing costs as Plenti reduced spend on digital loan acquisitions following the onset of the
COVID‑19 pandemic. This was partially offset by an increase in sales personnel costs to drive originations growth as the business
rebounded strongly in the second half of the year.
Product and development expense increased to $5.5 million, an increase of 19% on the prior year, reflecting ongoing investment
in the Group’s proprietary technology platform and personnel costs to support new product development.
Annual Report FY21 25
General and administrative expense (G&A) increased by $3.7 million to $13.9 million. The G&A expense lines includes both loan
operations (loan processing, underwriting, settlement, loan servicing) and support functions such as Finance and Legal, as well
as the executive team. The increase in costs was split roughly evenly between the two areas. In relation to loan operations, the
increase in costs was driven by investment in underwriting and processing staff (both onshore and offshore), given the increase
in loan throughput, as well as higher loan processing costs such as credit data costs and bank transaction fees. In relation to
other G&A, the increase in costs principally related to personnel costs as the business invested in more senior personnel to
enhance capability and support the business as it moved into a publicly listed environment. Equity incentive payments for all
members of the broader leadership group are also accounted for in G&A, and these increased as the historic employee share
option plan terminated at IPO and the new post‑IPO remuneration structure was implemented.
Management believe that, in addition to cost‑to‑income ratios, it is also instructive to report a cost‑to‑origination ratio, which
has reduced from 8.3% to 5.8%. Due to the effective interest rate method of accounting which spreads loan income over the
expected life of the loan but only applies to some costs involved in loan origination, the cost‑to‑income ratio can provide a
“lagged” view of operating efficiency. The cost‑to‑origination revenue provides a more direct view of operating leverage by
comparing in‑period new loans to the cost structure associated with originating those loans. Management note that the shift
in the portfolio towards automotive lending, where the majority of costs are treated under the effective interest rate method,
has supported an improvement in this ratio, in addition to broader operating leverage in the business.
Balance sheet
Assets
Cash and cash equivalents
Customer loans
Other assets
Total assets
Liabilities
Trade payables
Borrowings
Other liabilities
Total liabilities
Net assets
2021
$’000
2020
$’000
Change
$’000
Change
%
87,923
42,028
45,895
591,590
360,184
231,406
9,686
4,980
4,706
689,199
407,192
282,007
4,635
3,448
1,187
629,484
401,982
227,502
9,135
8,214
921
643,254
413,644
229,610
109%
64%
94%
69%
34%
57%
11%
56%
45,945
(6,452)
52,397
(812%)
Cash and cash equivalents of $87.9 million was a substantial increase on 31 March 2021, driven primarily by the $55 million IPO
proceeds received in September 2020. Of the $87.9 million, $29.4 million is corporate cash and $14.0 million is cash held in the
Provision Fund to cover losses on the Plenti Lending Platform. The remaining cash balance of $44.5 million is held in trust bank
accounts either in relation to Retail Lending Platform or warehouse facilities. In addition to this cash position, the Group also has
$3.4 million in liquid assets which can be readily converted to cash.
Customer loans increased 64% from 31 March 2020, driven by strong origination volumes during the year. Gross customer loans grew
to $614.6 million with strong growth across all verticals. This was partly offset by an increase in the ECL provision at 31 March 2021.
Other assets represents pre‑paid rate commissions, trade receivables, PPE, right‑of‑use assets, intangibles and other assets. The
increase is driven by the increase in prepaid commission expenses in line with the growth in automotive loan originations.
Trade payables represents the amount payable to creditors for the supply of goods and services that have been invoiced and are
payable in accordance with the supplier’s payment terms.
Borrowings increased in line with the growth in customer loans. Refer to page 26 for further details on Plenti’s funding sources.
Other liabilities represents lease liabilities, derivative financial instruments, provisions and accruals. The increase is mainly due to
increases in payroll liabilities and accrued interest payable on warehouse borrowings.
26
Directors’ report
Funding
Borrowings
Plenti Lending Platform
Wholesale Lending Platform
Warehouse facilities
Convertible notes
Total borrowings
2021
$’000
2020
$’000
Change
$’000
Change
%
300,152
48,082
281,250
–
304,215
70,394
18,500
8,873
(4,063)
(22,312)
262,750
(8,873)
629,484
401,982
227,502
(1%)
(32%)
1420%
(100%)
57%
Plenti benefits from having established several loan funding platforms which provide diversification in capital sources. At the
end of the period, $300 million of loan funding came from the Plenti Lending Platform, $48 million from the Wholesale Lending
Platform and $281 million from the two Warehouse facilities.
The value of loans funded by the Plenti Lending Platform remained broadly flat through the year. The Group expects to maintain
this platform as an important source of funding for the loan portfolio, particularly in relation to personal lending.
Growth in warehouse funding reflected the strong performance in automotive lending throughout the year as well as lending
through the new renewable and personal lend warehouse facility in the last few months of the year. The Group expects to
continue to expand its use of warehouse facility funding given the relatively low cost.
Convertible notes along with the embedded derivative were exercised on IPO. The associated values were subsequently
transferred to share capital.
At 31 March 2021, the Group had a total of $15.5 million invested in subordinated notes in the two warehouses. This value is not
shown on the face of the balance sheet as it is eliminated in the consolidated group accounts.
Change
$’000
Change
%
Cash flow
Interest income received
Other income
Interest and other finance costs paid
Payments to suppliers and employees
Cash flows from operating activities
2021
$’000
53,761
4,102
2020
$’000
41,021
1,671
(25,136)
(20,686)
(35,649)
(2,922)
(24,186)
(2,180)
12,740
2,431
(4,450)
(11,463)
(742)
Net increase in loans to customers
(237,441)
(135,058)
(102,383)
Other investing activities
(118)
8,511
(8,629)
Cash flows from investing activities
(237,559)
(126,547)
(111,012)
Net proceeds from issue of shares
Net proceeds from borrowings
Proceeds from issue of convertible notes
Other financing activities
Cash flows from financing activities
Net increase/(decrease) in cash
50,498
236,381
–
(503)
–
132,716
10,083
(564)
286,376
142,235
45,895
13,508
50,498
103,665
(10,083)
61
144,141
32,387
31%
145%
22%
47%
34%
76%
(101%)
88%
–
78%
(100%)
(11%)
101%
240%
Annual Report FY21 27
2021
$’000
2020
$’000
Change
$’000
Change
%
Reconciliation of net loss after tax to cash flow
from operating activities:
Pro forma net loss after tax
(15,092)
(16,232)
Add back: loan impairment expense
Add back: share‑based payments
Add back: depreciation and amortisation
Add back: IPO costs
Add back: other non‑cash items
Movement in working capital
Cash flow from operating activities
7,100
3,942
745
2,327
544
(2,488)
(2,922)
10,716
581
705
–
187
1,863
(2,180)
1,140
(3,616)
3,361
40
2,327
357
(4,351)
(742)
(7%)
(34%)
578%
6%
–
191%
(234%)
34%
Net cash outflow from operating activities increased 34% to $2.9 million with cash inflow from revenue offset by increased cash
outflow from funding costs and operating expenses. Operating expenses were higher mainly due to commission payments to
brokers and increased employment costs to support business growth. While directionally consistent with interest income per
the statement of profit or loss, cash interest income reflects actual fees received in the year rather than spread over the life of
the loan via the effective interest rate method. It is therefore higher than profit or loss interest income given the growing profile
of loan originations. Payments to suppliers and employees exhibit a similar effect where cash broker commission payments are
treated under the effective interest rate method in the profit or loss and hence cash payments are higher given the growth in
loans originated via brokers.
Other income grew materially in the year due to the receipt of $1.7 million in JobKeeper payments.
Group cash flow from operating activities includes cash flows in relation to the Provision Fund. In the financial year, the net
operating cash flows of the Provision Fund was $7.3 million (2020: $6.9 million). Cash outflow from operating activities for the
Group excluding the Provision Fund was $10.2 million (2020: $9.1 million).
Net cash outflow from investing activities increased by 88% to $237.6 million, reflecting the significant growth in originations
volume during the year. Other investing activities in the prior year mainly related to short‑term investments in term deposits
which matured in 2020.
Net cash inflow from financing activities increased 101% to $286.4 million, due to proceeds from the IPO and increased
warehouse funding.
Statutory to pro forma reconciliation
The table below sets out the pro forma adjustments applied in the year to 31 March 2021, by line item, in the statement of profit or
loss. The adjustments are intended to provide a normalised view of the operating performance of the Group, by excluding the
costs of the IPO and a number of non‑recurring benefits that would otherwise inflate the result. The methodology is consistent
with that used in preparation of Plenti’s Prospectus. Full details of the individual items are set out in the following section.
27%
42%
28%
73%
21%
nm
(32%)
(4%)
19%
37%
6%
11%
28
Directors’ report
2021
Statutory
$’000
2021
Pro forma
adjustments
$’000
2021
Pro forma
$’000
2020
Pro forma
$’000
Change
$’000
Change
%
Revenue
Interest revenue
Other income
Revenue before transaction costs
Transaction costs
Expenses
Funding costs
Expenses passed to unitholders
Loan impairment expense
Sales and marketing expense
Product development expense
50,744
2,381
53,125
(2,736)
(25,624)
(37)
(7,100)
(8,920)
(5,268)
–
–
–
–
508
–
(212)
(740)
(253)
50,744
39,840
10,904
2,381
53,125
1,672
41,512
(2,736)
(1,582)
709
11,613
(1,154)
(25,116)
(20,687)
(4,429)
(37)
(7,312)
(9,660)
(5,521)
680
(10,716)
(10,112)
(4,653)
(717)
3,404
452
(868)
General and administrative expense
(17,787)
3,879
(13,908)
(10,184)
(3,724)
Depreciation and amortisation
Total expenses
Net loss before income tax expense
(745)
(65,481)
(15,092)
–
3,182
3,182
(745)
(705)
(40)
(62,299)
(56,377)
(5,922)
(11,910)
(16,447)
4,537
(28%)
Summary of pro forma adjustments
The table below provides further details in relation to the individual elements of the pro forma adjustments included in the
financial statements above.
Pro forma adjustments
Incremental public company costs
Convertible note interest
Capital raising costs
Offer costs
Jobkeeper payments
COVID‑19 salary reductions
Impairment expense policy
Accelerated existing incentive plan vesting
Loss on derivative fair value
Total adjustments
Note
1
2
3
4
5
6
7
8
9
2021
$’000
(430)
488
31
2,327
(1,720)
(209)
(212)
2,497
410
3,182
2020
$’000
(956)
297
153
291
–
–
–
–
–
(215)
1.
Incremental public company costs include the incremental expenditure required to be a publicly listed company including Board, listing and ASX fees.
2. Convertible note interest relates to interest charged on convertible notes which converted to ordinary equity at IPO.
3. Capital raising costs are non-operational costs relating to prior capital raisings and primarily relate to consulting fees.
4.
IPO costs include legal and accounting due diligence costs, as well as corporate adviser fees and listing costs. A further $2,766,000 of IPO costs were recognised
directly in equity and are included in the cash flow statement in investing activities.
5. JobKeeper payments relate to payments received from the Australian government in relation to COVID-19.
6. COVID-19 salary reductions relate to reduced salary expenses as a result of employees taking voluntary pay reductions and hour cuts due to the uncertain impacts
of COVID-19 on Plenti’s business, net of a post-IPO bonus payment to employees who took voluntary pay cuts.
7.
Impairment expense policy relates to a change in Plenti’s bad debt write-off policy during the period, which was increased from 120 to 180 days to align with market
practice. This resulted in a period of lower than usual net charge-offs being recorded. While the lower charge-off expense was partially offset by a higher loan
impairment provision charge resulting from fewer aged loans being written off, Plenti has sought to estimate the net remaining benefit and has reversed this out
of the pro forma result as this is a non-recurring benefit.
8. Accelerated existing incentive plan vesting relates to the accelerated vesting of the historic employee share option plan on IPO, which is a one-off non-cash transaction.
9. Loss on derivative fair value relates to an increase in the fair value of the derivative liability to listing date and is incurred in connection with the convertible notes
which all convert to ordinary equity upon listing.
Annual Report FY21 29
Significant changes in the state of affairs
Environmental regulation
Corporate reorganisation
On 18 August 2020, the shareholders of the Company and Plenti
Pty Limited and its controlled entities undertook a corporate
reorganisation process prior to the IPO. Consequently, the
Company acquired the already operating Plenti Pty Limited
and its controlled entities (Pre‑IPO Plenti Group).
This corporate reorganisation does not represent a
business combination in accordance with AASB 3 ‘Business
Combinations’, and the appropriate accounting treatment
for recognising the new group structure is on the basis
that the transaction is a form of capital reconstruction and
group reorganisation. Accordingly, the financial statements
have been presented as a continuation of the Pre‑IPO Plenti
Group. As such, financial statements of the Group include the
historical financial information of the Pre‑IPO Plenti Group for
the period before the acquisition. These financial statements
include the financial results for the Group from acquisition
to 31 March 2021 and the Pre‑IPO Plenti Group for the period
1 April 2020 to the date of acquisition.
The comparative information presented in the financial
statements represents the financial position of the Pre‑
IPO Plenti Group as at 31 March 2020, and the financial
performance of the Pre‑IPO Plenti Group for the year ended
31 March 2020.
The equity structure in the Pre‑IPO Plenti Group, including the
number and type of equity instruments issued at the date of
acquisition, reflects the equity structure of the Company.
IPO
On 23 September 2020, Plenti listed on the ASX. The IPO
raised $55 million in funds which will be used mainly to
accelerate Plenti’s growth through funding required equity
investments in warehouse facilities and increasing investment
in product and technology and sales and marketing.
The Group is not subject to any significant environmental
regulation under Australian Commonwealth or State law.
Information on directors
Mary Ploughman
Independent Non-Executive Chairman
BEc
Experience and expertise:
Mary was appointed independent Non‑Executive Chairman in
July 2020. Mary brings 30 years of leadership, financial services
(including the non‑bank sector), capital markets, securitisation,
mergers & acquisition, governance and risk management
experience on a range of financial institutions, infrastructure
and not for profit boards. Mary served as a Non‑Executive
Director of Sydney Motorway, and as Deputy Chairman of
the Australian Securitisation Forum. Mary is a former CEO of
Resimac Group Ltd. Before joining Resimac Mary worked at
Price Waterhouse Coopers and Macquarie Bank.
Mary currently serves as Non‑Executive Director on TF Global
Markets (Aust) Ltd Boards, Prospa Group Ltd and is a also a
member of Prospa’s Advisory Board, and is a senior advisor
to Gresham. Mary holds a Bachelor of Economics from The
University of Sydney, is an Associate of the Securities Institute
of Australia, a Graduate member of the Australian Institute
of Company Directors and is a Fellow of the Australian
Securitisation Forum.
Other current directorships:
Prospa Group Limited (ASX:PGL) since 1 March 2021
Former directorships (last 3 years):
None
There were no other significant changes in the state of affairs
of the Group during the financial year.
Special responsibilities:
Member of the Audit and Risk Committee and Chair of the
Nomination and Remuneration Committee
Matters subsequent to the end of the
financial year
No matter or circumstance has arisen since 31 March 2021
that has significantly affected, or may significantly affect,
the Group’s operations, the results of those operations, or the
Group’s state of affairs in future financial years.
Interests in shares:
20,000 ordinary fully paid shares
Interests in options:
450,000 options to acquire ordinary fully paid shares
Likely developments and expected results
of operations
Information on likely developments in the operations of the
Group and the expected results of operations have not been
included in this report because the directors believe it would
be likely to result in unreasonable prejudice to the Group.
Interests in rights:
None
Contractual rights to shares:
None
30
Directors’ report
Daniel Foggo
Susan Forrester AM
Executive Director and Chief Executive Officer
BComm (Honours), MBus (Distinction)
Independent Non-Executive Director
BA, LLB (Honours), EMBA, FAICD
Experience and expertise:
Daniel co‑founded Plenti and has acted as CEO since its
inception. Prior to that, he worked in investment banking
for over a decade, including at Rothschild in London and
at Barclays in Sydney. Daniel was a co‑founding director of
PartPay, a buy‑now‑pay‑later business, which was acquired
by Zip Co Limited in 2019. He has been recognised for his
achievements in the FinTech industry, being named the
FinTech Leader of the Year at the inaugural Australian FinTech
Awards in 2016 and FinTech Entrepreneur of the Year at the
Australian FinTech Business Awards in 2017.
Experience and expertise:
Susan was appointed as a Non‑Executive Director in
October 2020. Susan has extensive commercial, strategic and
governance experience across a range of industries, including
technology and financial services. Susan is a qualified lawyer,
has an EMBA from the Melbourne Business School and is a
Fellow and Councillor of the Australian Institute of Company
Directors. Susan was awarded a Member in the General
Division of the Order of Australia for significant services to
business through her strategic and governance roles and for
her advocacy for women.
Other current directorships:
None
Former directorships (last 3 years):
None
Special responsibilities:
None
Interests in shares:
2,121,857 ordinary fully paid shares
Interests in options:
210,000 options to acquire ordinary fully paid shares
Interests in rights:
210,843 rights to acquire ordinary fully paid shares
Contractual rights to shares:
None:
Other current directorships:
G8 Education Limited (ASX:GEM) since 1 November 2011,
Over the Wire Ltd (ASX:OTW) since 1 November 2015, Jumbo
Interactive Limited (ASX:JIN) since 1 October 2020
Former directorships (last 3 years):
Xenith IP Group Limited (resigned 15 August 2019), National
Veterinary Care Limited (de‑listed on 9 April 2020) and Viva
Leisure Limited (resigned 31 December 2020)
Special responsibilities:
Chair of the Audit and Risk Committee (from 1 February 2021),
Member of the Nomination and Remuneration Committee
Interests in shares:
400,000 ordinary fully paid shares
Interests in options:
None
Interests in rights:
None
Contractual rights to shares:
None:
Annual Report FY21 31
Martin Dalgleish
Independent Non-Executive Director
B.Bus, MBA, GAICD
Peter Behrens
Non-Executive Director
MA (Honours)
Experience and expertise:
Martin currently serves as an Independent Non‑Executive
Director of Michael Cassel Group Holdings Pty Ltd, KPMG
Australia, Partner at Asia Principal Capital Pty Limited,
Investment Partner at Morpheus Ventures, Investment
Partner at HEAL Partners, and Chairman of each of ActivePipe
Group Pty Ltd, Hometime Group Pty Ltd and Realtair
Pty Ltd. Martin has over 30 years’ executive experience in
technology, consumer, telecommunications and media
with Publishing and Broadcasting Limited (PBL), Optus,
PepisCo and IBM Australia. Martin has previously served as a
Non‑Executive Director or Alternate Director at many leading
media and technology companies, including PBL Media,
Ticketek, Hoyts, FOXTEL, Fox Sports Australia, Mediaworks
(NZ), SEEK, and Carsales.
Other current directorships:
None
Former directorships (last 3 years):
None
Experience and expertise:
Peter currently serves as Chief Commercial Officer and
Director of Retail Money Market Ltd (RMML). Peter has
20 years’ experience in law, financial services and growth
companies with Ashurst, Royal Bank of Scotland plc, Laxfield
Capital, RMML and Metro Bank plc. Peter previously served as
a non‑executive director of George Banco Limited.
Other current directorships:
None
Former directorships (last 3 years):
None
Special responsibilities:
Member of Audit and Risk Committee
Interests in shares:
1,337,124 ordinary fully paid shares
Special responsibilities:
Chair of the Audit and Risk Committee (resigned 1
February 2021), Member of the Audit and Risk Committee
(from 1 February 2021), Member of the Nomination and
Remuneration Committee
Interests in shares:
846,112 ordinary fully paid shares
Interests in options:
150,000 options to acquire ordinary fully paid shares
Interests in rights:
None
Contractual rights to shares:
None
Interests in options:
150,000 options to acquire ordinary fully paid shares
‘Other current directorships’ quoted above are current
directorships for listed entities only and exclude directorships
of all other types of entities, unless otherwise stated.
Interests in rights:
None
Contractual rights to shares:
None
‘Former directorships (last 3 years)’ quoted above are
directorships held in the last 3 years for listed entities only
and exclude directorships of all other types of entities,
unless otherwise stated.
Company secretaries
David Hwang was appointed company secretary on
12 August 2020. David is a Principal and Chief Compliance
Officer of Automic Group, which provides fully integrated
legal, registry and outsourced company secretarial services.
He is an experienced corporate lawyer and company secretary
specialising in listings on the ASX (IPOs and reverse listings),
equity capital markets and providing advice on corporate
governance compliance issues. David holds a Bachelor of
Laws from UNSW and is also a notary public.
Benjamin Milsom was company secretary for the full year and
is also the Chief Commercial Officer. His qualifications and
experience are covered on page 19.
32
Directors’ report
Meetings of directors
The number of meetings of the Company’s Board of Directors (the Board) held during the year ended 31 March 2021, and the
number of meetings attended by each director were:
Mary Ploughman
Daniel Foggo
Susan Forrester AM
Martin Dalgleish
Peter Behrens
Full Board
Nomination and
Remuneration Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
5
5
4
5
5
5
5
4
5
5
–
–
–
–
–
–
–
–
–
–
3
3
2
3
3
3
3
2
3
3
Held: represents the number of meetings held during the time the director held office.
There were no meetings of the Nomination and Remuneration Committee held between the time of listing and 31 March 2021.
Three meetings of the Nomination and Remuneration Committee have been held during the period from 31 March 2021 to the
date of release of this report.
Remuneration report (audited)
Approach to remuneration
The remuneration report details the key management
personnel remuneration arrangements for the Group, in
accordance with the requirements of the Corporations Act
2001 and its Regulations.
Key management personnel (KMP) are those persons having
authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly,
including all directors.
The remuneration report is set out under the following
main headings:
■ Approach to remuneration
■ Short‑term incentive plan (STIP)
■ Long‑term incentive plan (LTIP)
■ Details of remuneration for KMP
■ Service agreement summaries
■ Share‑based compensation
■ Additional disclosures relating to KMP
The objective of the Group’s executive reward framework
is to attract highly capable personnel to deliver value for
shareholders, to align their interests to those of shareholders
and to reward executives for results delivered. The reward
framework also places an emphasis on the responsible
and compliant operation of the Group, which is a threshold
requirement before any executive incentives are payable.
As part of the IPO of Plenti on the ASX in September 2020,
a review was undertaken to determine an appropriate
executive remuneration framework for the Group as a listed
business. The review took into account existing management
remuneration, peer and market benchmarks and best
practice remuneration structures. The base remuneration,
STIP and LTIP structures outlined in this report resulted from
this review process. The Board of Directors (the Board) ensures
that executive reward satisfies the following key criteria for
good reward governance practices:
■ competitiveness and reasonableness
■ acceptability to shareholders
■ performance linkage / alignment of executive
compensation
■ transparency
Annual Report FY21 33
The Nomination and Remuneration Committee is responsible
for determining and reviewing remuneration arrangements
for directors and executives. The performance of the Group
depends on the quality of its directors and executives. The
remuneration philosophy is to attract, motivate and retain
high performance and high quality personnel.
The Nomination and Remuneration Committee has
structured an executive remuneration framework that is
market competitive and complementary to the reward
strategy of the Group.
The reward framework is designed to align executive reward
with shareholders’ interests. The Board has considered that it
should seek to enhance shareholders’ interests by:
■ delivering a material component of incentive remuneration
in the form of equity instruments
■ recognising the importance of the Group achieving scale
in its operations while managing cost and risk, leading to
a focus on growth in originations and revenue, cost ratios
and compliance in the setting of reward targets
Non-executive directors remuneration
Fees and payments to non‑executive directors reflect the
demands and responsibilities of their role. Non‑executive
directors’ fees and payments are reviewed annually by the
Nomination and Remuneration Committee. The Nomination
and Remuneration Committee may, from time to time, receive
advice from independent remuneration consultants to ensure
non‑executive directors’ fees and payments are appropriate
and in line with the market. The chairman’s fees are
determined independently to the fees of other non‑executive
directors, based on comparative roles in the external market.
The chairman is not present at any discussions relating to the
determination of her own remuneration.
Executive remuneration
The Group aims to reward executives based on their position
and responsibility, with a level and mix of remuneration which
has both fixed and variable components.
The executive remuneration and reward framework has three
primary components:
■ setting remuneration at a level that enables the Group to
■ fixed remuneration
attract and retain high calibre executives
Additionally, the reward framework seeks to enhance
executives’ interests by:
■ rewarding capability and experience
■ reflecting competitive reward for contribution to growth in
shareholder wealth
■ providing a clear structure for earning rewards
In accordance with best practice corporate governance, the
structure of non‑executive director and executive director
remuneration is separate.
■ at risk short‑term performance incentives (STIP)
■ at risk long‑term performance incentives (LTIP)
The combination of these comprises the executive’s total
remuneration. A number of executives also retain exposure
to Group performance via options held under the pre‑IPO
employee share option plan.
Fixed remuneration, consisting of base salary and
superannuation, is reviewed annually by the Nomination and
Remuneration Committee based on individual and business
unit performance, the overall performance of the Group and
comparable market remunerations.
Executives may receive their fixed remuneration in the form
of cash or other fringe benefits where it does not create any
additional costs to the Group and provides additional value to
the executive.
34
Directors’ report
Short‑term incentive plan
The short‑term incentive plan is designed to align the targets of the business with the performance hurdles of executives within
an annual performance cycle. Short‑term incentive (STI) payments are granted to executives based on specific annual targets
and key performance indicators (KPIs) being achieved.
Plan objective
■ The STIP rewards financial and non‑financial results delivered by the executive team in respect of a
given financial year
■ The objective of the STIP is to provide an incentive for executives to deliver strong results for the Group, to
reward them for delivering such results, and to attract and retain highly capable personnel in the business
Availability
■ The STIP is only available to senior leaders of the Group, principally the Executive Committee and their
direct reports
Reward construct
■ The STIP opportunity for each participant is set annually as a percentage of their base salary at both a
“Target” and “Maximum” level
‒ STI payments are made via a combination of cash and share rights – for KMP the STI award is
comprised of 25% cash and 75% equity (share rights)
‒ Assessment of delivery against STI performance criteria is made at the conclusion of the relevant
financial year, with cash payments made immediately following the release of the Group’s annual
financial results. Any share rights entitlement is also determined at this time; however, the rights vest
in two equal tranches ~6 months and ~15 months post results if the executive remains employed by
the Group at that time.
Performance
criteria
■ Awards under the STIP are determined as follows:
‒ 50% based on delivery of Group wide targets
‒ 50% based on delivery of individual or team goals
■ Performance criteria are measured against “Threshold”, “Target” and “Maximum” targets:
‒ For performance at or below Threshold, no STI will be awarded
‒ For performance between Threshold and Target, the STI award will be determined pro‑rata against
the Target STI opportunity for the executive
‒ For performance between Target and Maximum, the STI award will be determined pro‑rata against
the Maximum STI opportunity for the executive
Compliance
requirements
■ All awards under the STIP are subject to a gateway in relation to there being no compliance breaches
which have a material financial or reputational impact on the Group
Board discretion
■ All STIP awards are subject to a general Board discretion, including in relation to general compliance
and appropriate conduct of business
Operation of the STIP commenced from 1 October 2020, following the IPO, and the award for the FY21 is on a pro‑rata basis for the
period of the year for which it operated. That is, the FY21 award value has been determined as “full year potential award x 50%”.
In respect of the STIP for FY21 (operating only in 2H FY21), the performance criteria were structured as follows:
Group performance measures
Growth in total loan origination volumes versus prior comparable period (2H21 vs 2H20)
Cash Net Profit after Tax (NPAT)
Total Group measures
Individual team goals
30%
20%
50%
50%
Annual Report FY21 35
Long‑term incentive plan
The long‑term incentive plan is intended to align the interests of senior executives with those of shareholders and provide an
incentive for building medium to longer term value for shareholders. Shares are awarded to executives over a period of 3 years
based on their continued tenure with the Group and specified performance thresholds.
All long‑term incentives (LTIs) are subject to a compliance and governance gateway. Failure to meet appropriate compliance and
governance standards will result in a forfeiture of some or all LTIs for the relevant period.
Plan objective
■ The LTIP rewards the building of shareholder value in the Group over the medium to longer term
■ The objective of the LTIP is to align the interests of senior executives with shareholders, to reward them
for executing a business strategy that builds the value of the business over the longer term and to
enable the Group to attract and retain highly capable senior executives
Availability
■ The LTIP is only available to members of the Executive Committee
Reward construct
■ The LTIP award for an executive in a given year is set as a percentage of their base salary
■ The LTIP is comprised 100% of share rights which are granted to participating executives at the start of
the relevant financial year
■ 50% of the share rights granted in a given year will vest after 2 years and the remaining 50% after 3 years,
dependent on the extent to which the vesting conditions for that award series has been met
Vesting conditions
■ Vesting of share rights under the LTIP is determined as follows:
‒ 50% based on achievement of performance hurdles
‒ 50% based on continued service of the executive at the vesting date
Compliance
requirements
■ All awards under the STIP are subject to a gateway in relation to there being no compliance breaches
which have a material financial or reputational impact on the Group
Board discretion
■ All STIP awards are subject to a general Board discretion, including in relation to general compliance
and appropriate conduct of business
In respect of the LTIP award granted in FY21, the applicable performance hurdles were as follows:
Revenue growth – compound annual growth rate above FY20 year
Cost‑to‑income ratio – improvement in ratio in most recent financial year from FY20 year
Strategic development hurdles – execution of key elements of the Group’s funding strategy and delivery of
positive operating cash flows (pre variable rate commissions)
20%
10%
20%
Details of remuneration for KMP
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
The key management personnel of the Group consisted of the following directors of Plenti Group Limited:
■ Mary Ploughman
■ Daniel Foggo
■ Susan Forrester AM
■ Martin Dalgleish
■ Peter Behrens
And the following persons:
■ Miles Drury – Chief Financial Officer
■ Benjamin Milsom – Chief Commercial Officer
■ Glenn Riddell – Chief Operating Officer
36
Directors’ report
Short-term benefits
Post-
employment
benefits
Long-
term
benefits
Share-based payments
2021
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
share rights
$
Equity-
settled
share
options
and rights 1
$
Total
$
Non-Executive Directors:
Mary Ploughman
145,691
Susan Forrester AM
34,731
Martin Dalgleish
Peter Behrens
68,288
54,306
Executive Directors:
–
–
–
–
Daniel Foggo 2
249,888
30,625
Other Key Management Personnel:
Miles Drury
334,045
30,625
Benjamin Milsom
229,428
Glenn Riddell
229,428
21,875
21,875
1,345,805
105,000
Notes:
–
–
–
–
–
–
–
–
–
13,841
–
6,487
–
–
–
–
–
–
–
–
–
219,037
378,569
–
34,731
75,605
150,380
75,605
129,911
26,649
22,361
91,875
130,120
551,518
34,644
23,874
23,874
–
91,875
297,382
788,571
15,972
15,972
65,625
287,373
644,147
65,625
287,373
644,147
129,369
54,305
315,000
1,372,495
3,321,974
1. Under the terms of the historical ESOP, at IPO, vesting of options was accelerated. This resulted in all unrecognised expense in relation to outstanding options
being recognised as an expense in the period. The expense for option related share-based payments is therefore at an elevated level in 2021.
2. While all executives accepted a material reduction in salary during the period from April to June 2020 in response to the uncertainty caused by the COVID-19
pandemic, Daniel Foggo elected to receive no salary during this period.
Annual Report FY21 37
Short-term benefits
Post-
employment
benefits
Long-
term
benefits
Share-based payments
2020
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
share rights
$
Non-Executive Directors:
Mary Ploughman*
9,081
Martin Dalgleish
55,447
Vaughn Richtor**
38,500
Executive Directors:
Daniel Foggo
222,184
Other Key Management Personnel:
Benjamin Milsom
222,184
Glenn Riddell
222,184
Natalie Housson***
225,611
Miles Drury****
14,375
1,009,566
* Appointed on 19 February 2020.
** Resigned on 20 September 2019.
*** Ceased to be a KMP on 19 March 2020.
**** KMP from 19 March 2020.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
863
5,267
–
21,108
21,108
21,108
21,431
1,366
92,251
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Equity-
settled
share
options
and rights
$
2,608
–
(12,259)
Total
$
12,552
60,714
26,241
27,912
271,204
23,585
266,877
23,585
266,877
59,532
306,574
–
15,741
124,963
1,226,780
38
Directors’ report
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Mary Ploughman
Susan Forrester AM
Martin Dalgleish
Peter Behrens
Vaughn Richtor
Executive Directors:
Daniel Foggo
Other Key Management Personnel:
Miles Drury
Benjamin Milsom
Glenn Riddell
Natalie Housson
Fixed remuneration
At risk – STI
At risk – LTI
2021
2020
2021
2020
2021
2020
42%
100%
50%
42%
–
79%
–
100%
–
147%
–
–
–
–
–
54%
90%
22%
47%
42%
42%
–
100%
91%
91%
81%
16%
14%
14%
–
–
–
–
–
–
–
–
–
–
–
58%
–
50%
58%
–
21%
–
–
–
(47%)
24%
10%
37%
44%
44%
–
–
9%
9%
19%
The level of STI award in any given year is determined by the extent to which the Group overall and each executive individually
meets their agreed objectives. The Board retains an overriding ability to adjust the STI award up or down dependent on a holistic
assessment of Group and individual performance. In FY21 there was no STI program in place for 1H. The STIP was in operation
for 2H FY21 and is to be paid on a pro‑rata basis for the year – that is, each executive can achieve up to 50% of a full year STI for
FY21. In respect of their 50% pro‑rata STI for FY21, the Board has determined, based on the excellent overall performance of the
business, that the KMP will be at 100% of their STI opportunity.
The proportion of the cash bonus paid/payable or forfeited is as follows:
Name
Executive Directors:
Daniel Foggo
Other Key Management Personnel:
Miles Drury
Benjamin Milsom
Glenn Riddell
STI
paid/
payable
STI
paid/
payable
STI forfeited
2021
2020
2021
2020
100%
100%
100%
100%
–
–
–
–
–
–
–
–
–
–
–
–
Annual Report FY21 39
Service agreement summaries
Remuneration and other terms of employment for key
management personnel are formalised in service agreements.
Details of these agreements are as follows:
Daniel Foggo
Chief Executive Officer
Daniel Foggo is entitled to receive total fixed remuneration
of $350,000 per annum plus superannuation. Daniel is also
eligible to earn a short‑term incentive of up to 70% of salary
during each financial year (35% in FY21, given operating for six
months only) and a long‑term incentive up to 100% of salary
(subject to the achievement of performance hurdles).
Daniel’s employment agreement may be terminated by Plenti
or Daniel, giving the other six months’ notice in writing of such
termination. If either party gives notice of termination, Plenti
may make a payment in lieu of notice. In the event notice of
termination is given by either party, Plenti may direct Daniel
to take enforced leave (Gardening Leave) during any notice
period of termination, during which time his remuneration will
not be reduced or withheld.
Plenti may terminate Daniel’s employment immediately for
gross misconduct and in other specified circumstances. Upon
the termination of Daniel’s employment, he will be subject
to a maximum post‑employment restraint of trade period of
12 months.
The enforceability of the restraint clause is subject to standard
legal requirements.
Daniel is entitled to five weeks’ annual leave per annum plus
other leave in accordance with applicable legislation.
Miles Drury
Chief Financial Officer
Miles Drury is entitled to receive total fixed remuneration of
$350,000 per annum plus superannuation. Miles is also eligible
to earn a short‑term incentive of up to 70% of salary during
each financial year (35% in FY21 given operating for six months
only) and a long‑term incentive of up to 100% of salary (subject
to the achievement of performance hurdles).
Miles’ employment agreement may be terminated by Plenti
or Miles, giving the other four months’ notice in writing of
such termination. If either party gives notice of termination,
Plenti may make a payment in lieu of notice. In the event
notice of termination is given by either party, Plenti may direct
Miles to take Gardening Leave during any notice period of
termination, during which time his remuneration will not be
reduced or withheld.
Plenti may terminate Miles’ employment immediately for
gross misconduct and in other specified circumstances. Upon
the termination of Miles’ employment, he will be subject to
a maximum post‑employment restraint of trade period of 12
months. The enforceability of the restraint clause is subject to
all usual legal requirements.
Miles is entitled to leave in accordance with applicable legislation.
Benjamin Milsom
Chief Commercial Officer
Ben Milsom is entitled to receive total fixed remuneration of
$250,000 per annum plus superannuation. Ben is also eligible
to earn a short‑term incentive of up to 70% of salary during
each financial year (35% in FY21, given operating for six months
only) and a long‑term incentive of up to 100% of salary (subject
to the achievement of performance hurdles).
Ben’s employment agreement may be terminated by Plenti
or Ben, giving the other six months’ notice in writing of such
termination. If either party gives notice of termination, Plenti
may make a payment in lieu of notice. In the event notice
of termination is given by either party, Plenti may direct
Ben to take Gardening Leave during any notice period of
termination, during which time his remuneration will not be
reduced or withheld.
Plenti may terminate Ben’s employment immediately for
gross misconduct and in other specified circumstances.
Upon the termination of Ben’s employment, he will be subject
to a maximum post‑employment restraint of trade period of
12 months. The enforceability of the restraint clause is subject
to all usual legal requirements.
Ben is entitled to leave in accordance with applicable legislation.
Glenn Riddell
Chief Operating Officer
Glenn Riddell is entitled to receive total fixed remuneration
of $250,000 per annum plus superannuation. Glenn is also
eligible to earn a short‑term incentive of up to 70% of salary
during each financial year (35% in FY21, given operating for six
months only) and a long‑term incentive of up to 100% of salary
(subject to the achievement of performance hurdles).
Glenn’s employment agreement may be terminated by
Plenti or Glenn, giving the other six months’ notice in writing
of such termination. If either party gives notice of termination,
Plenti may make a payment in lieu of notice. In the event
notice of termination is given by either party, Plenti may direct
Glenn to take Gardening Leave during any notice period of
termination, during which time his remuneration will not be
reduced or withheld.
Plenti may terminate Glenn’s employment immediately for
gross misconduct and in other specified circumstances.
Upon the termination of Glenn’s employment, he will be subject
to a maximum post‑employment restraint of trade period of
12 months. The enforceability of the restraint clause is subject
to all usual legal requirements.
Glenn is entitled to leave in accordance with applicable legislation.
Key management personnel have no entitlement to
termination payments in the event of removal for misconduct.
40
Directors’ report
Share‑based compensation
Issue of share rights
Details of share rights issued to directors and other key management personnel as part of compensation during the year ended
31 March 2021 are set out below:
Name
Daniel Foggo
Miles Drury
Benjamin Milsom
Glenn Riddell
Date
Share rights
Issue price
$
18 September 2020
1 October 2020
1 October 2020
1 October 2020
210,843
210,843
150,602
150,602
$1.6600
350,000
$1.6600
350,000
$1.6600
250,000
$1.6600
250,000
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are as follows:
Name
Number of
options
granted
Grant date
Vesting date and
exercisable date 1
Expiry date 1
Mary Ploughman
300,000
22 July 2020
23 September 2020
31 May 2022
Martin Dalgleish
150,000
22 July 2020
23 September 2020
31 May 2022
Peter Behrens
150,000
22 July 2020
23 September 2020
31 May 2022
Miles Drury
150,000
8 July 2020
23 September 2020
31 May 2022
Exercise
price
$1.3833
$1.3833
$1.3833
$1.3833
Fair value
per option
at grant date
$0.053
$0.053
$0.053
$0.056
Note:
1. At grant, the options vested through to 31 March 2023, however vesting accelerated to 23 September 2020 due to the IPO of the Group. At that time it was
determined by the Board that the expiry date for unexercised options would be 31 May 2022, unless otherwise adjusted by the Board.
Options granted carry no dividend or voting rights.
The number of options over ordinary shares granted to and vested by directors and other key management personnel as part of
compensation during the year ended 31 March 2021 are set out below:
Name
Mary Ploughman
Martin Dalgleish
Peter Behrens
Miles Drury
Benjamin Milsom
Glenn Riddell
Number of
options
granted
during the
year
2021
Number of
options
granted
during the
year
2020
Number of
options
vested
during the
year
2021
Number of
options
vested
during the
year
2020
300,000
150,000
300,000
150,000
150,000
–
–
150,000
150,000
150,000
300,000
450,000
–
–
–
–
–
–
510,000
580,002
510,000
580,002
109,998
109,998
Annual Report FY21 41
Additional disclosures relating to KMP
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key management
personnel of the Group, including their personally related parties, is set out below:
Ordinary shares
Mary Ploughman
Daniel Foggo 1
Susan Forrester AM
Martin Dalgleish
Peter Behrens2
Miles Drury
Benjamin Milsom3
Glenn Riddell4
Note:
Balance at
the start of
the year
Converted
at time of
IPO
Additions
during the
year
Disposals/
other
Balance at
the end of
the year
–
–
1,752,060
76,482
20,000
293,315
–
–
400,000
777,750
38,241
30,121
–
–
75,150
132,000
–
–
–
–
1,337,124
200,530
–
–
2,736,960
114,723
2,281,090
–
–
–
–
–
–
–
–
–
20,000
2,121,857
400,000
846,112
1,337,124
200,530
75,150
132,000
5,132,773
1. Daniel Foggo is a discretionary beneficiary of the Westbourne Trust which holds 35,417,643 fully paid ordinary shares in the Company. However, Mr Foggo does not
hold a relevant interest in any of the shares which are held in the Trust.
2. Peter Behrens held an indirect interest in an equivalent number of shares via his interest in Retail Money Market Limited (RMML). Shares owned by RMML in Plenti
Group Limited were distributed in specie to RMML’s ultimate shareholders following the Group’s IPO, resulting in the acquisition of a direct interest in 1,337,124
shares by Mr Behrens.
3. Benjamin Milson is a discretionary beneficiary of a trust which holds 4,068,000 fully paid ordinary shares in the Company. However, Mr Milsom does not hold a
relevant interest in any of the shares which are held in the trust.
4. Glenn Riddell is a discretionary beneficiary of a trust which holds 4,068,000 fully paid ordinary shares in the Company. However, Mr Riddell does not hold a relevant
interest in any of the shares which are held in the trust.
Option holding
The number of options over ordinary shares in the Company held during the financial year by each director and other members
of key management personnel of the Group, including their personally related parties, is set out below:
Options over ordinary shares
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
Mary Ploughman
Daniel Foggo
Martin Dalgleish
Peter Behrens
Miles Drury
Benjamin Milsom
Glenn Riddell
150,000
300,000
210,000
–
–
300,000
690,000
690,000
–
150,000
150,000
150,000
–
–
2,040,000
750,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
450,000
210,000
150,000
150,000
450,000
690,000
690,000
2,790,000
This concludes the remuneration report, which has been audited.
42
Directors’ report
Shares under option
Unissued ordinary shares of Plenti Group Limited under option at the date of this report are as follows:
Grant date
16 October 2015
14 March 2016
1 April 2016
16 February 2017
31 March 2017
9 June 2017
20 September 2017
23 November 2017
22 January 2018
1 April 2018
5 May 2018
1 August 2018
3 September 2018
3 December 2018
6 May 2019
1 June 2019
1 August 2019
1 December 2019
2 December 2019
13 January 2020
19 February 2020
20 March 2020
31 March 2020
8 July 2020
22 July 2020
Expiry date
Exercise
price
Number
under option
31 March 2022
$0.5000
910,002
31 March 2022
$0.5000
390,000
31 March 2022
$0.5000
180,000
31 March 2022
$0.8250
–
31 March 2022
$0.8250
889,998
31 March 2022
$0.8250
300,000
31 March 2022
31 March 2022
31 March 2022
31 March 2022
31 March 2022
31 March 2022
31 March 2022
31 March 2022
31 March 2022
31 March 2022
31 March 2022
31 March 2022
31 March 2022
$0.9567
$0.9567
$0.9567
$0.9567
$0.9567
$1.3333
$1.3333
$1.3833
$1.3833
$1.3833
$1.3833
$1.3833
$1.3833
120,000
100,002
30,000
750,000
270,000
60,000
120,000
120,000
840,000
360,000
120,000
439,998
210,000
31 March 2022
$1.3833
2,220,000
31 March 2022
31 March 2022
31 March 2022
31 March 2022
31 March 2022
$1.3833
$1.3833
$1.3833
$1.3833
$1.3833
240,000
30,000
300,000
390,000
600,000
9,990,000
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the
Company or of any other body corporate.
Shares issued on the exercise of options
The following ordinary shares of Plenti Group Limited were issued during the year ended 31 March 2021 and up to the date of this
report on the exercise of options granted:
Date options granted
16 October 2015
16 February 2017
31 March 2017
1 April 2018
Exercise
price
Number of
shares issued
$0.5000
$0.8250
$0.8250
$0.9567
40,002
26,776
19,998
4,572
91,348
Annual Report FY21 43
Indemnity and insurance of officers
The Company has indemnified the directors and executives of
the Company for costs incurred, in their capacity as a director
or executive, for which they may be held personally liable,
except where there is a lack of good faith.
Officers of the Company who are former partners
of Grant Thornton
There are no officers of the Company who are former partners
of Grant Thornton.
During the financial year, the Company paid a premium in
respect of a contract to insure the directors and executives
of the Company against a liability to the extent permitted
by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability and the
amount of the premium.
Rounding of amounts
The Company is of a kind referred to in Corporations
Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to ‘rounding-off’. Amounts
in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in
certain cases, the nearest dollar.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial
year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by
the auditor.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required
under section 307C of the Corporations Act 2001 is set out
immediately after this directors’ report.
During the financial year, the Company has not paid a
premium in respect of a contract to insure the auditor of
the Company or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the
Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which
the Company is a party, for the purpose of taking responsibility
on behalf of the Company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-
audit services provided during the financial year by the auditor
are outlined in note 27 to the financial statements.
The directors are satisfied that the provision of non-audit
services during the financial year, by the auditor (or by another
person or firm on the auditor’s behalf), is compatible with the
general standard of independence for auditors imposed by
the Corporations Act 2001.
The directors are of the opinion that the services as disclosed
in note 27 to the financial statements do not compromise
the external auditor’s independence requirements of the
Corporations Act 2001 for the following reasons:
■ all non-audit services have been reviewed and approved to
ensure that they do not impact the integrity and objectivity
of the auditor; and
■ none of the services undermine the general principles
relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants issued by the
Accounting Professional and Ethical Standards Board,
including reviewing or auditing the auditor’s own work,
acting in a management or decision-making capacity for
the Company, acting as advocate for the Company or jointly
sharing economic risks and rewards.
Auditor
Grant Thornton continues in office in accordance with
section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors,
pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
Daniel Foggo
Director
Mary Ploughman
Director
24 May 2021
Sydney
44
Auditor’s independence declaration
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. www.grantthornton.com.au Level 17, 383 Kent Street Sydney NSW 2000 Correspondence to: Locked Bag Q800 QVB Post Office Sydney NSW 1230 T +61 2 8297 2400 F +61 2 9299 4445 E info.nsw@au.gt.com W www.grantthornton.com.au Auditor’s Independence Declaration To the Directors of Plenti Group Limited As lead auditor for the audit of Plenti Group Limited for the financial year ended 31 March 2021, I declare that, to the best of my knowledge and belief, there have been: a no contraventions of the auditor independence requirements in relation to the audit; and b no contraventions of any applicable code of professional conduct in relation to the audit. Grant Thornton Audit Pty Ltd Chartered Accountants M A Adam-Smith Partner – Audit & Assurance Sydney, 24 May 2021 Annual Report FY21 Financial statements
Statement of profit or loss and other
comprehensive income
Statement of financial position
Statement of changes in equity
46
Statement of cash flows
47
48
Notes to the financial statements
Directors’ declaration
Independent auditor’s report to the
members of Plenti Group Limited
45
49
50
82
83
“ Plenti has enabled clients of Gordon
& Barry to continue to access legal
services at a complex time of their life ...
we have no hesitation in
suggesting Plenti to our
clients that are in need of it. ”
David Barry, Legal Practitioner Director
Gordon & Barry Lawyers Pty Ltd
General information
The financial statements cover Plenti Group Limited as a
Group consisting of Plenti Group Limited and the entities
it controlled at the end of, or during, the year. The financial
statements are presented in Australian dollars, which is
Plenti Group Limited’s functional and presentation currency.
Plenti Group Limited is a listed public company limited by
shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
Level 5, 14 Martin Place
Sydney NSW 2000
A description of the nature of the Group’s operations and
its principal activities is included in the directors’ report,
which is not part of the financial statements.
The financial statements were authorised for issue, in
accordance with a resolution of directors, on 24 May 2021.
The directors have the power to amend and reissue the
financial statements.
46
Statement of profit or loss and other comprehensive income
For the year ended 31 March 2021
Revenue
Interest revenue
Other income
Total revenue before transaction costs
Transaction costs
Net income
Expenses
Funding costs
Expense passed to unitholders
Customer loan impairment expense
Sales and marketing expense
Product development expense
General and administration expense
Depreciation and amortisation expense
Total expenses
Loss before income tax expense
Income tax expense
Loss after income tax expense for the year attributable to the owners
of Plenti Group Limited
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss
Hedging gain/(loss)
Other comprehensive income/(loss) for the year, net of tax
Note
4
5
6
7
Consolidated
2021
$’000
2020
$’000
50,744
39,840
2,381
53,125
(2,736)
1,671
41,511
(1,582)
50,389
39,929
(25,624)
(20,984)
(37)
(7,100)
(8,920)
(5,268)
(17,787)
(745)
680
(10,716)
(10,112)
(4,653)
(9,671)
(705)
(65,481)
(56,161)
(15,092)
(16,232)
–
–
(15,092)
(16,232)
23
23
(36)
(36)
Total comprehensive loss for the year attributable to the owners of Plenti Group Limited
(15,069)
(16,268)
Basic earnings per share
Diluted earnings per share
33
33
Cents
(10.06)
(10.06)
Cents
(12.68)
(12.68)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
Annual Report FY21
Statement of financial position
As at 31 March 2021
Assets
Cash and cash equivalents
Customer loans
Term deposits
Trade receivables
Other assets
Property, plant and equipment
Right‑of‑use assets
Intangibles
Total assets
Liabilities
Trade payables
Provisions
Other liabilities
Borrowings
Lease liabilities
Derivative financial instruments
Total liabilities
Net assets/(liabilities)
Equity
Issued capital
Reserves
Accumulated losses
Total equity/(deficiency)
47
Consolidated
Note
2021
$’000
2020
$’000
8
10
9
11
12
13
14
19
15
16
17
18
20
21
87,923
42,028
591,590
360,184
482
62
457
357
8,047
2,434
295
609
191
303
1,102
327
689,199
407,192
4,635
1,051
7,369
3,448
652
4,813
629,484
401,982
702
13
1,206
1,543
643,254
413,644
45,945
(6,452)
105,934
42,328
5,284
(65,273)
45,945
1,401
(50,181)
(6,452)
The above statement of financial position should be read in conjunction with the accompanying notes
48
Statement of changes in equity
For the year ended 31 March 2021
Consolidated
Balance at 1 April 2019
Loss after income tax expense for the year
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Share‑based payments (note 34)
Balance at 31 March 2020
Consolidated
Balance at 1 April 2020
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income/(loss) for the year
Transactions with owners in their capacity as owners:
Issued
capital
$’000
42,328
–
–
–
–
42,328
Issued
capital
$’000
42,328
–
–
–
Contributions of equity, net of transaction costs (note 20)
63,513
Reserves
$’000
Accumulated
losses
$’000
Total
deficiency
in equity
$’000
856
–
(36)
(36)
581
1,401
Reserves
$’000
1,401
–
23
23
–
(33,949)
9,235
(16,232)
(16,232)
–
(36)
(16,232)
(16,268)
–
581
(50,181)
(6,452)
Accumulated
losses
$’000
(50,181)
(15,092)
–
Total
equity
$’000
(6,452)
(15,092)
23
(15,092)
(15,069)
–
–
–
63,513
3,942
11
Share‑based payments (note 34)
Exercise of share options
Balance at 31 March 2021
–
93
3,942
(82)
105,934
5,284
(65,273)
45,945
The above statement of changes in equity should be read in conjunction with the accompanying notes
Annual Report FY21 Statement of cash flows
For the year ended 31 March 2021
Cash flows from operating activities
Interest income received
Other income received
Jobkeeper payments received
Interest and other finance costs paid
Payments to suppliers and employees
Net cash used in operating activities
Cash flows from investing activities
Net increase in loans to customers
Payments for property, plant and equipment
Payments for intangibles
Proceeds from/(payments for) term deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
IPO and other share issuance costs paid
Proceeds from share options exercised
Proceeds from borrowings
Proceeds from issue of convertible notes
Repayment of borrowings
Repayment of lease liabilities
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
49
Consolidated
2021
$’000
53,761
2,381
1,721
2020
$’000
41,021
1,671
–
(25,136)
(20,686)
(35,649)
(2,922)
(24,186)
(2,180)
(237,441)
(135,057)
(94)
–
(24)
(79)
(396)
8,985
(237,559)
(126,547)
55,000
(4,502)
54
–
–
–
429,428
243,456
–
10,083
(193,047)
(110,740)
(557)
(564)
286,376
142,235
45,895
42,028
87,923
13,508
28,520
42,028
Note
31
12
14
20
32
32
32
32
8
The above statement of cash flows should be read in conjunction with the accompanying notes
50
Notes to the financial statements
31 March 2021
Note 1. Significant accounting policies
Plenti Group Limited (the Company) is a company
incorporated in Australia and listed on the Australian
Securities Exchange (ASX). The Company was incorporated
as a public company on 12 August 2020. On 18 August 2020,
the shareholders of the Company and Plenti Pty Limited and
its controlled entities undertook a corporate reorganisation
process prior to an initial public offering (IPO) on the ASX.
Through the reorganisation, the Company acquired Plenti Pty
Limited, the existing head operating entity, and its controlled
entities (Pre‑IPO Plenti Group).
This corporate reorganisation does not represent a
business combination in accordance with AASB 3 ‘Business
Combinations’, and the appropriate accounting treatment
for recognising the new group structure is on the basis
that the transaction is a form of capital reconstruction and
group reorganisation. Accordingly, the financial statements
have been presented as a continuation of the Pre‑IPO Plenti
Group. As such, financial statements of the Group include the
historical financial information of the Pre‑IPO Plenti Group for
the period before the acquisition. These financial statements
include the financial results for the Group from acquisition
to 31 March 2021 and the Pre‑IPO Plenti Group for the period
1 April 2020 to the date of acquisition.
The comparative information presented in the financial
statements represents the financial position of the Pre‑
IPO Plenti Group as at 31 March 2020, and the financial
performance of the Pre‑IPO Plenti Group for the year
ended 31 March 2020.
The principal accounting policies adopted in the preparation
of the financial statements are set out below. These policies
have been consistently applied to all the years presented,
unless otherwise stated.
New or amended Accounting Standards and
Interpretations adopted
The Group has adopted all of the new or amended Accounting
Standards and Interpretations issued by the Australian
Accounting Standards Board (AASB) that are mandatory for
the current reporting period.
Any new or amended Accounting Standards or Interpretations
that are not yet mandatory have not been early adopted.
Critical accounting estimates
The preparation of the financial statements requires the
use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of
applying the Group’s accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial
statements, are disclosed in note 2.
Parent entity information
In accordance with the Corporations Act 2001, these
financial statements present the results of the Group only.
Supplementary information about the parent entity is
disclosed in note 35.
Principles of consolidation
The consolidated financial statements incorporate the
assets and liabilities of all subsidiaries of Plenti Group Limited
(Company or parent entity) as at 31 March 2021 and the results
of all subsidiaries for the year then ended. Plenti Group Limited
and its subsidiaries together are referred to in these financial
statements as the ‘Group’.
Subsidiaries are all those entities over which the Group
has control. The Group controls an entity when the Group
is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are de‑consolidated
from the date that control ceases.
Intercompany transactions, balances and unrealised gains
on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies
adopted by the Group.
The acquisition of subsidiaries is accounted for using the
acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as
an equity transaction, where the difference between the
consideration transferred and the book value of the share of
the non‑controlling interest acquired is recognised directly in
equity attributable to the parent.
Basis of preparation
These general purpose financial statements have been
prepared in accordance with Australian Accounting Standards
and Interpretations issued by the AASB and the Corporations
Act 2001, as appropriate for for‑profit oriented entities. These
financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting
Standards Board (IASB).
Where the Group loses control over a subsidiary, it
derecognises the assets including goodwill, liabilities and
non‑controlling interest in the subsidiary together with any
cumulative translation differences recognised in equity.
The Group recognises the fair value of the consideration
received and the fair value of any investment retained
together with any gain or loss in profit or loss.
Historical cost convention
The financial statements have been prepared under the
historical cost convention, except for financial instruments
which are measured at fair value.
Operating segments
Operating segments are presented as one operating
segment through satisfying the aggregation criteria in AASB
8 ‘Operating Segments’. The information presented is on
the same basis as the internal reports provided to the Chief
Executive Officer on an aggregated basis. Refer to note 3 for
further information.
Annual Report FY21 51
Revenue recognition
Transaction costs
The Group recognises revenue as follows:
Interest income
Interest income includes interest and loan origination fees.
Interest income is recognised using the effective interest
method. This is a method of calculating the amortised cost
of a financial asset and allocating the interest income over
the relevant period using the effective interest rate, which is
the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to the net
carrying amount of the financial asset.
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the
consideration to which the Group is expected to be entitled
in exchange for transferring goods or services to a customer.
For each contract with a customer, the Group: identifies
the contract with a customer; identifies the performance
obligations in the contract; determines the transaction price
which takes into account estimates of variable consideration
and the time value of money; allocates the transaction price
to the separate performance obligations on the basis of
the relative stand‑alone selling price of each distinct good
or service to be delivered; and recognises revenue when
or as each performance obligation is satisfied in a manner
that depicts the transfer to the customer of the goods or
services promised.
Variable consideration within the transaction price, if any,
reflects concessions provided to the customer such as
discounts, rebates and refunds, any potential bonuses
receivable from the customer and any other contingent
events. Such estimates are determined using either the
‘expected value’ or ‘most likely amount’ method. The
measurement of variable consideration is subject to
a constraining principle whereby revenue will only be
recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue
recognised will not occur. The measurement constraint
continues until the uncertainty associated with the variable
consideration is subsequently resolved. Amounts received
that are subject to the constraining principle are recognised
as a refund liability.
Other fee income
Other fee income which mainly consists of borrower arrears
fees, administration fees and referral fees are recognised as
income at a point in time as they are incurred.
Government rebates
Government rebates including any research and development
tax incentives are recognised in profit or loss in the period in
which the rebates are received.
The Group was an eligible recipient of JobKeeper and received
the subsidy during the year ended 31 March 2021. The subsidy
has been recognised in the profit or loss by reducing
employee expenses.
Transaction costs include commissions for brokers and broker
aggregator groups directly attributable to the origination of
loans. These costs are recognised in profit or loss using the
effective interest method.
Funding costs
Funding costs include interest paid and payable to retail and
wholesale investors via the Plenti Lending Platform and Plenti
Wholesale Lending Platform. Interest and establishment costs
relating to the Group’s securitisation trust warehouse facilities
are disclosed as funding costs. Interest expense is recognised
as it accrues using the effective interest rate method.
Expense passed to unitholders
Expense passed to unitholders reflects the fact that some
impairment expenses recognised by the Group are passed on
to investors in the Wholesale Lending Platform via a reduction
in unitholder liabilities. This is recognised as a reduction in
expenses (contra expense) in the statement of profit or loss.
Expenses passed to unitholders are recognised at the point in
time the impairment expenses are incurred by the Group.
Income tax
The income tax expense or benefit for the period is the
tax payable on that period’s taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by
the changes in deferred tax assets and liabilities attributable to
temporary differences, unused tax losses and the adjustment
recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary
differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those
tax rates that are enacted or substantively enacted, except for:
■ When the deferred income tax asset or liability arises from
the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at
the time of the transaction, affects neither the accounting
nor taxable profits; or
■ When the taxable temporary difference is associated
with interests in subsidiaries, associates or joint ventures,
and the timing of the reversal can be controlled and it is
probable that the temporary difference will not reverse
in the foreseeable future.
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those
temporary differences and losses.
The carrying amount of recognised and unrecognised
deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent
that it is no longer probable that future taxable profits will be
available for the carrying amount to be recovered. Previously
unrecognised deferred tax assets are recognised to the extent
that it is probable that there are future taxable profits available
to recover the asset.
52
Note 1. Significant accounting policies continued
Investments and other financial assets
Investments and other financial assets are initially measured
at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through
profit or loss. Such assets are subsequently measured at either
amortised cost or fair value depending on their classification.
Classification is determined based on both the business
model within which such assets are held and the contractual
cash flow characteristics of the financial asset unless an
accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive
cash flows have expired or have been transferred and the
Group has transferred substantially all the risks and rewards
of ownership. When there is no reasonable expectation of
recovering part or all of a financial asset, its carrying value
is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of
the following conditions are met: (i) it is held within a business
model whose objective is to hold assets in order to collect
contractual cash flows; and (ii) the contractual terms of the
financial asset represent contractual cash flows that are solely
payments of principal and interest.
Impairment of financial assets
The Group recognises a loss allowance for expected credit
losses (ECL) on financial assets which are either measured
at amortised cost or fair value through other comprehensive
income. The measurement of the loss allowance depends
upon the Group’s assessment at the end of each reporting
period as to whether the financial instrument’s credit risk
has increased significantly since initial recognition, based
on reasonable and supportable information that is available,
without undue cost or effort to obtain. ECL on the Wholesale
Lending Platform is offset by passing the losses to the
wholesale investors. This is reflected in expense passed to
unitholders in the statement of profit or loss.
The Group has applied the general approach to measuring
ECL based on credit migration between three stages. ECL is
modelled collectively for portfolios of similar exposure and is
measured as the product of the probability of default (PD), the
loss given default (LGD) and the exposure at default (EAD) and
includes forward‑looking and macroeconomic information. As
detailed in note 2, the calculation of ECL requires judgement
and the choice of inputs, estimates and assumptions used
involves uncertainty at the time that they are made. Outcomes
within the next financial period that are different from
management’s assumptions and estimates could result in
changes to the timing and amount of ECL to be recognised.
Deferred tax assets and liabilities are offset only where there is
a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred
tax liabilities; and they relate to the same taxable authority
on either the same taxable entity or different taxable entities
which intend to settle simultaneously.
Plenti Group Limited (the ‘head entity’) and its wholly‑
owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation regime.
The head entity and each subsidiary in the tax consolidated
group continue to account for their own current and deferred
tax amounts. The tax consolidated group has applied the
‘separate taxpayer within group’ approach in determining the
appropriate amount of taxes to allocate to members of the
tax consolidated group.
In addition to its own current and deferred tax amounts, the
head entity also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and
unused tax credits assumed from each subsidiary in the tax
consolidated group.
Assets or liabilities arising under tax funding agreements
with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax
consolidated group. The tax funding arrangement ensures
that the intercompany charge equals the current tax liability
or benefit of each tax consolidated group member, resulting
in neither a contribution by the head entity to the subsidiaries
nor a distribution by the subsidiaries to the head entity.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short‑term, highly
liquid investments with original maturities of three months or
less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
Term deposits
Term deposits are held with financial institutions with original
maturities greater than three months.
Customer loans
Customer loans are initially recognised at fair value plus
capitalised origination fees less capitalised transaction
costs and subsequently measured at amortised cost
using the effective interest method, less any allowance for
expected credit losses. The initial fair value of customer
loans includes capitalised origination fees net of capitalised
transaction costs.
Trade and other receivables
Trade receivables are amounts due from customers for goods
sold or services performed in the ordinary course of business
and recognised initially at fair value and subsequently
at amortised cost. They are generally due for settlement
within 30 days.
Notes to the financial statements 31 March 2021Annual Report FY21 53
Stage 1
12 month ECL
No significantly
increased credit risk
Stage 2
Lifetime ECL
Significantly increased
credit risk
Financial instruments that have not had a significant increase in credit risk
since initial recognition require, at initial recognition, a provision for ECL
associated with the probability of default events occurring within the next
12 months (12 month ECL).
In the event of a significant increase in credit risk since initial recognition,
a provision is required for the lifetime ECL representing probable losses
over the life of the financial instrument (lifetime ECL). This stage references
exposures that are at least 30 days past due (equivalent to at least one
missed payment cycle) but less than 90 days past due (less than three
missed payment cycles).
Stage 3
Lifetime ECL
Objective evidence
of impairment
Financial instruments that move into Stage 3 require a lifetime ECL to be
recognised. This stage references exposures that are at least 90 days past
due (more than 3 missed payment cycles).
To measure ECL, the Group applies a PD x EAD x LGD
approach incorporating the time value of money. For stage
1 loans, a forward‑looking approach on a 12‑month horizon
is applied. For stage 2 loans, a lifetime view on the credit is
applied. The lifetime ECL is the discounted sum of the portions
of lifetime losses related to default events within each time
window of 12 months until maturity. For stage 3 loans, the PD
equals 100% and the LGD and EAD represent a lifetime view of
the losses based on characteristics of defaulted loans.
In addition to the base PD x EAD x LGD approach, management
may apply further adjustments to reflect expectations relating
to macroeconomic or other factors that management believe
are not adequately reflected in the base ECL position.
For financial assets measured at fair value through other
comprehensive income, the loss allowance is recognised
within other comprehensive income. In all other cases, the loss
allowance is recognised in the statement of profit or loss.
Property, plant and equipment
Plant and equipment is stated at historical cost less
accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the
acquisition of the items.
Depreciation is calculated on a straight‑line basis to write off
the net cost of each item of property, plant and equipment
over their expected useful lives as follows:
Leasehold improvements
Office equipment
Fixtures and fittings
4 years
4 years
10 years
The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired
period of the lease or the estimated useful life of the assets,
whichever is shorter.
An item of property, plant and equipment is derecognised
upon disposal or when there is no future economic benefit to
the Group. Gains and losses between the carrying amount and
the disposal proceeds are taken to profit or loss.
Right‑of‑use assets
A right‑of‑use asset is recognised at the commencement date
of a lease. The right‑of‑use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted
for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received,
any initial direct costs incurred, and, except where included
in the cost of inventories, an estimate of costs expected to be
incurred for dismantling and removing the underlying asset,
and restoring the site or asset.
Right‑of‑use assets are depreciated on a straight‑line basis
over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Group
expects to obtain ownership of the leased asset at the end of
the lease term, the depreciation is over its estimated useful life.
Right‑of use assets are subject to impairment or adjusted for
any remeasurement of lease liabilities.
The Group has elected not to recognise a right‑of‑use asset
and corresponding lease liability for short‑term leases with
terms of 12 months or less and leases of low‑value assets.
Lease payments on these assets are expensed to profit or loss
as incurred.
Intangible assets
Intangible assets acquired are initially recognised at cost. Finite
life intangible assets are subsequently measured at cost less
amortisation and any impairment. Amortisation begins when
the asset is available for use, that is, when it is in the location
and condition necessary for it to be capable of operating in
the manner intended by management. The gains or losses
recognised in profit or loss arising from the derecognition of
intangible assets are measured as the difference between net
disposal proceeds and the carrying amount of the intangible
asset. The method and useful lives of finite life intangible
assets are reviewed annually. Changes in the expected pattern
of consumption or useful life are accounted for prospectively
by changing the amortisation method or period.
Expenditure on acquiring and developing eligible website
development costs have been capitalised and amortised on
a straight‑line basis over the period of their expected benefit.
The intangible assets are amortised over their useful lives of
three years.
54
Note 1. Significant accounting policies continued
Lease liabilities
Impairment of non-financial assets
Non‑financial assets are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less
costs of disposal and value‑in‑use. The value‑in‑use is the
present value of the estimated future cash flows relating to
the asset using a pre‑tax discount rate specific to the asset or
cash‑generating unit to which the asset belongs. Assets that
do not have independent cash flows are grouped together to
form a cash‑generating unit.
Trade and other payables
These amounts represent liabilities for goods and services
provided to the Group prior to the end of the financial year
and which are unpaid. Due to their short‑term nature, they
are measured at amortised cost and are not discounted.
The amounts are unsecured and are usually paid within
30 days of recognition.
A lease liability is recognised at the commencement date of
a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of
the lease, discounted using the interest rate implicit in the
lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate. Lease payments comprise of
fixed payments less any lease incentives receivable, variable
lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees,
exercise price of a purchase option when the exercise of the
option is reasonably certain to occur, and any anticipated
termination penalties. The variable lease payments that
do not depend on an index or a rate are expensed in the
period in which they are incurred.
Lease liabilities are measured at amortised cost using
the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future
lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase
option and termination penalties. When a lease liability is
remeasured, an adjustment is made to the corresponding
right‑of use asset, or to profit or loss if the carrying amount of
the right‑of‑use asset is fully written down.
Borrowings
Provisions
Borrowings are initially recognised at the fair value of the
consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective
interest method.
Fees paid on the establishment of warehouse loan facilities,
which are not an incremental cost relating to the actual
draw‑down of the facility, are recognised as prepayments
and amortised on a straight‑line basis over 7 years, being
the maximum term of the loan being funded by the
warehouse facility.
Convertible notes
The component of convertible notes that exhibit the
characteristics of a liability is recognised as a liability within
borrowing in the statement of financial position, net of
transaction costs.
On the issue of convertible notes, the fair value of the
liability component is determined using a market rate for an
equivalent non‑convertible bond and this amount is carried
on the amortised cost basis until extinguished on conversion
or redemption. The corresponding interest on convertible
notes is expensed to profit or loss.
Unitholder liabilities
Unitholder liabilities are funds invested by retail and wholesale
investors into the lending platforms managed by the Group.
Investors’ interests are structured as units in the relevant
managed investment scheme under which the platform
operates. Unitholder liabilities are initially recognised at the
fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised
cost using the effective interest rate method. Unitholder
liabilities are included within borrowings on the statement of
financial position.
Provisions are recognised when the Group has a present
(legal or constructive) obligation as a result of a past event, it
is probable the Group will be required to settle the obligation,
and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best
estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks
and uncertainties surrounding the obligation. If the time
value of money is material, provisions are discounted using a
current pre‑tax rate specific to the liability. The increase in the
provision resulting from the passage of time is recognised as a
finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non‑monetary
benefits, annual leave and long service leave expected to
be settled wholly within 12 months of the reporting date are
measured at the amounts expected to be paid when the
liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not
expected to be settled within 12 months of the reporting
date are measured at the present value of expected future
payments to be made in respect of services provided by
employees up to the reporting date. Consideration is given
to expected future wage and salary levels, experience of
employee departures and periods of service. Expected future
payments are discounted using market yields at the reporting
date on high quality corporate bonds with terms to maturity
and currency that match, as closely as possible, the estimated
future cash outflows.
Notes to the financial statements 31 March 2021Annual Report FY21 55
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans
are expensed in the period in which they are incurred.
Share-based payments
Equity‑settled share‑based compensation benefits are
provided to employees.
Equity‑settled transactions are awards of shares, rights to
shares or options over shares, that are provided to employees
in exchange for the rendering of services.
The cost of equity‑settled transactions is measured at fair
value on grant date. Fair value for options is determined using
either the Binomial or Black‑Scholes option pricing model
that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and
expected price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of
the option, together with non‑vesting conditions that do not
determine whether the Group receives the services that entitle
the employees to receive payment. No account is taken of
any other vesting conditions.
The cost of equity‑settled transactions is recognised as an
expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is
calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest
and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative
amount calculated at each reporting date less amounts
already recognised in previous periods.
Market conditions are taken into consideration in
determining fair value. Therefore, any awards subject to
market conditions are considered to vest irrespective
of whether or not that market condition has been met,
provided all other conditions are satisfied.
If equity‑settled awards are modified, as a minimum
an expense is recognised as if the modification has not
been made. An additional expense is recognised, over the
remaining vesting period, for any modification that increases
the total fair value of the share‑based compensation benefit as
at the date of modification.
If the non‑vesting condition is within the control of the
Group or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the
control of the Group or employee and is not satisfied during
the vesting period, any remaining expense for the award is
recognised over the remaining vesting period, unless the
award is forfeited.
If equity‑settled awards are cancelled prior to vesting, an
adjustment is made in that period to reverse all historically
recognised expenses on the cancelled awards. If a new
replacement award is substituted for the cancelled award,
the cancelled and new award is treated as if they were
a modification.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date
a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The
accounting for subsequent changes in fair value depends on
whether the derivative is designated as a hedging instrument,
and if so, the nature of the item being hedged.
Cash flow hedges
Cash flow hedges are used to cover the Group’s exposure
to variability in cash flows that is attributable to particular
risks associated with a recognised asset or liability or a firm
commitment which could affect profit or loss. The effective
portion of the gain or loss on the hedging instrument is
recognised in other comprehensive income through the cash
flow hedges reserve in equity, whilst the ineffective portion
is recognised in profit or loss. Amounts taken to equity are
transferred out of equity and included in the measurement of
the hedged transaction when the forecast transaction occurs.
Cash flow hedges are tested for effectiveness on a regular
basis both retrospectively and prospectively to ensure that
each hedge is highly effective and continues to be designated
as a cash flow hedge. If the forecast transaction is no longer
expected to occur, the amounts recognised in equity are
transferred to profit or loss.
If the hedging instrument is sold, terminated, expires,
exercised without replacement or rollover, or if the hedge
becomes ineffective and is no longer a designated hedge, the
amounts previously recognised in equity remain in equity until
the forecast transaction occurs.
Embedded derivative
Derivatives embedded in host contracts are accounted for as
separate derivatives and recorded at fair value if their economic
characteristics and risks are not closely related to those of the
host contracts and the host contracts are not classified as fair
value through profit or loss. These embedded derivatives are
measured at fair value with changes in fair value recognised
in profit or loss. Reassessment only occurs if there is either
a change in the terms of the contract that significantly
modifies the cash flows that would otherwise be required or
a reclassification of a financial instrument out of the fair value
through profit or loss category.
Fair value measurement
When an asset or liability, financial or non‑financial, is
measured at fair value for recognition or disclosure purposes,
the fair value is based on the price that would be received
to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement
date; and assumes that the transaction will take place either:
in the principal market; or in the absence of a principal market,
in the most advantageous market.
Fair value is measured using the assumptions that market
participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For
non‑financial assets, the fair value measurement is based
on its highest and best use. Valuation techniques that are
appropriate in the circumstances and for which sufficient data
are available to measure fair value, are used, maximising the
use of relevant observable inputs and minimising the use of
unobservable inputs.
56
Note 1. Significant accounting policies continued
Assets and liabilities measured at fair value are classified
into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
Classifications are reviewed at each reporting date and
transfers between levels are determined based on a
reassessment of the lowest level of input that is significant
to the fair value measurement.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax
authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of
the amount of GST recoverable from, or payable to, the
tax authority.
For recurring and non‑recurring fair value measurements,
external valuers may be used when internal expertise
is either not available or when the valuation is deemed
to be significant. External valuers are selected based
on market knowledge and reputation. Where there is a
significant change in fair value of an asset or liability from
one period to another, an analysis is undertaken, which
includes a verification of the major inputs applied in the
latest valuation and a comparison, where applicable, with
external sources of data.
Issued capital
Ordinary shares are classified as equity
Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction,
net of tax, from the proceeds.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to the owners of Plenti Group Limited, excluding
any costs of servicing equity other than ordinary shares, by
the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in
ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account
the post income tax effect of interest and other financing
costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been
issued for no consideration in relation to dilutive potential
ordinary shares. The diluted earnings per share were not
adjusted for share options and share rights as they were anti‑
dilutive. Refer to note 33 for further information.
Goods and Services Tax (GST) and other similar taxes
Revenues, expenses and assets are recognised net of the
amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised
as part of the cost of the acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount
of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included
in other receivables or other payables in the statement of
financial position.
Rounding of amounts
The Company is of a kind referred to in Corporations
Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to ‘rounding‑off’. Amounts
in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars,
or in certain cases, the nearest dollar.
Note 2. Critical accounting judgements,
estimates and assumptions
The preparation of the financial statements requires
management to make judgements, estimates and
assumptions that affect the reported amounts in the
financial statements. Management continually evaluates its
judgements and estimates in relation to assets, liabilities,
contingent liabilities, revenue and expenses. Management
bases its judgements, estimates and assumptions on
historical experience and on various other factors, including
expectations of future events, management believes to
be reasonable under the circumstances. The resulting
accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
(refer to the respective notes) within the next financial year
are discussed below.
Share‑based payment transactions
The Group measures the cost of equity‑settled transactions
with employees by reference to the fair value of the equity
instruments at the date at which they are granted. In respect
of options, the fair value is determined by using either the
Binomial or Black‑Scholes model taking into account the
terms and conditions upon which the instruments were
granted. The accounting estimates and assumptions relating
to equity‑settled share‑based payments would have no
impact on the carrying amounts of assets and liabilities
within the next annual reporting period but may impact
profit or loss and equity.
Amortisation of deferred upfront fees
The expected life used for the amortisation of deferred
upfront fees requires a degree of estimation and judgement.
It is based on customer prepayment history analysis at the
product level and industry prepayment trends where available.
If historical product information is not sufficiently available,
or for simplicity, the contractual term is used. Where the
expected life differs from the actual repayment life of the
loan, such differences will impact the carrying value of the
customer loans and the interest income that is recognised in
the current and future periods.
Notes to the financial statements 31 March 2021Annual Report FY21 57
Allowance for expected credit losses
Fair value measurement hierarchy
The assessment of credit risk, and the estimation of ECL
requires a degree of estimation and judgement. It is based on
unbiased probability weightings and incorporates all available
information relevant to the assessment, including information
about past events, current conditions and reasonable and
supportable information about future events and economic
conditions at the reporting date. As detailed in note 1, the
Group has established a process whereby forward‑looking
macroeconomic scenarios and probability weightings are
developed for ECL calculation purposes.
While Australia has demonstrated an ability to control
the spread of COVID‑19 and the outlook for the Australian
economy has improved through late 2020 and into 2021, the
ongoing impacts from the COVID‑19 pandemic have increased
estimation uncertainty in the preparation of ECL calculations.
The estimation uncertainty is associated with:
(a) the ongoing potential for disruption to the economy
from actions by governments, businesses and consumers
to contain the spread of the virus such as closure of
international borders and periods of lock‑down;
(b) the ability of the economy to adjust to removal of
Government support and stimulus activities such as
JobKeeper and elevated JobSeeker payments; and
(c) other flow‑on effects from the broad economic and
social disruption caused by COVID‑19 through the
last year, including the risk of business insolvency
as measures providing protection from credit default
are unwound.
ECL estimates disclosed in these financial statements
are based on forecasts of economic conditions which
reflect assumptions and expectations as at 31 March 2021.
There is a considerable degree of judgement involved
in preparing forecasts. The underlying assumptions are
subject to uncertainties which are often outside the control
of the entity. Accordingly, actual economic conditions are
likely to be different from those forecast since anticipated
events frequently do not occur as expected, and the effect
of those differences may significantly impact accounting
estimates included in these financial statements. Refer to
note 10 for further details on the financial impact of COVID‑19
on the ECL provision.
Note 4. Interest revenue
Origination and loan fees
Interest income
Bank interest
The Group is required to classify all assets and liabilities,
measured at fair value, using a three level hierarchy, based
on the lowest level of input that is significant to the entire fair
value measurement, being: Level 1: Quoted prices (unadjusted)
in active markets for identical assets or liabilities that the entity
can access at the measurement date; Level 2: Inputs other
than quoted prices included within Level 1 that are observable
for the asset or liability, either directly or indirectly; and Level
3: Unobservable inputs for the asset or liability. Considerable
judgement is required to determine what is significant to
fair value and therefore which category the asset or liability is
placed in can be subjective.
Derivative financial instruments
Interest rate swap contracts, designated as cash flow hedges,
are measured at fair value. Reliance is placed on future cash
flows and judgement is made on a regular basis, through
prospective and retrospective testing, including at the
reporting date, that the hedges are still highly effective.
Note 3. Operating segments
Identification of reportable operating segments
The Group’s operations consist primarily of the provision of
financial services in Australia. The Group has considered the
requirements of AASB 8 ‘Operating Segments’ and assessed
that the Group has one operating segment, representing the
consolidated results, as this is the only segment which meets
the requirements of AASB 8.
Major customers
There are no customers which account for more than 10%
of the Group’s revenue for the year ended 31 March 2021
(2020: none).
Consolidated
2021
$’000
11,828
38,803
113
2020
$’000
11,083
28,415
342
50,744
39,840
Origination and loan fees are deferred upfront fees and commissions which are paid or received at loan origination but which are
recognised as interest revenue over time using the effective interest rate method in accordance with AASB 9.
58
Note 5. Other income
Other fee income
Government rebates
Consolidated
2021
$’000
841
1,540
2,381
2020
$’000
705
966
1,671
Other fee income is recognised at a point in time. The income is recognised entirely from Australian customers.
Government rebates relate to government research and development incentives that are available to eligible businesses
including Plenti.
Note 6. Expenses
Loss before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
Fixtures and fittings
Office equipment
Buildings right‑of‑use assets
Total depreciation
Amortisation
Website
Total depreciation and amortisation
Finance costs
Interest and finance charges paid/payable on warehouse borrowings
Interest and finance charges paid/payable on lease liabilities
Convertible note interest
Finance costs expensed
Superannuation expense
Consolidated
2021
$’000
2020
$’000
22
19
61
507
609
136
745
2,933
38
508
3,479
22
19
45
529
615
90
705
123
54
297
474
Defined contribution superannuation expense
1,197
1,032
Share-based payments expense
Share‑based payments expense 1
3,942
581
1. At IPO, vesting of the historical ESOP options were accelerated resulting in an additional share-based payments expense of $2,497,000 in the current period.
Operating expenses for the year were $65,481,000 (2020: $55,161,000), of which employee expenses were $15,269,000 (2020:
$14,593,000). Employee expenses benefited from JobKeeper receipts of $1,721,000 and net COVID‑related salary reductions of
$209,000. In the statement of profit or loss and other comprehensive income these employee expenses are included within
the ‘sales and marketing expense’, the ‘product development expense’ and the ‘general and administration expense’ on a
departmental allocation basis.
Notes to the financial statements 31 March 2021Annual Report FY21 Note 7. Income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 27.5%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Permanent differences
Current year losses for which no tax benefit was recognised
Current year temporary differences for which no deferred tax asset was recognised
Income tax expense
59
Consolidated
2021
$’000
2020
$’000
(15,092)
(4,150)
(16,232)
(4,464)
(275)
(4,425)
3,456
969
–
(93)
(4,557)
4,157
400
–
As at 31 March 2021, the balance of carry forward tax losses for which a tax benefit was not recognised were $44,590,000
(2020: $28,977,000). The Group has sought advice relating to the availability of tax losses for future utilisation. At 31 March 2021, the
Group satisfied the continuity of ownership test (COT) in respect of the 2019, 2020 and 2021 financial years, with associated losses
of $32,288,000. For the 2016, 2017 and 2018 financial years ($11,070,000 of losses) utilisation is subject to the Group meeting the
same business test (SBT) from 30 June 2020 until the time of utilisation. For the 2014 and 2015 financial years ($1,231,000 of losses),
usage would be subject to meeting the SBT from 30 June 2014 and 30 June 2015 respectively.
Note 8. Cash and cash equivalents
Cash at bank
Cash held in trust
Cash held in Provision Fund
Cash held in trust
Consolidated
2021
$’000
29,437
44,507
13,979
2020
$’000
6,681
24,704
10,643
87,923
42,028
The trust cash balances are held as part of the Group’s funding arrangements and are not available to the Group for any other
purposes. The balances held in the trust bank accounts include amounts received by investors on the Lending Platforms but
not currently on loan to borrowers and amounts drawn from funders in the Warehouse funding facilities which are available for
funding loan receivables. As at 31 March 2021, investor cash held in the Lending Platforms totalled $26,670,000 with $16,100,000
of funds available in accounts relating to the Warehouse facilities. A further $1,736,000 was held in a restricted account in relation
to funding of a government program.
Cash held in Provision Fund
The Provision Fund was established to help protect retail investors in the Group’s Retail Lending Platform from losses relating
to borrower late payment or default. Based on a determination by the Provision Fund Claims Committee, cash held in Provision
Fund can be used to compensate retail investors in instances of late payment and default. Cash held in Provision Fund comes
from borrowers who contribute an amount based on their risk profile and is incorporated as part of their loan. Cash held in
Provision Fund is not available to the Group for general corporate purposes.
60
Note 9. Term deposits
Restricted term deposits
Consolidated
2021
$’000
482
2020
$’000
457
Refer to note 24 for further information on fair value measurement.
The restricted term deposits bears interest of 0.39% (2020: 1.25%) per annum and has a maturity of less than one year.
Note 10. Customer loans
Gross customer loans
Less: Deferred upfront fees
Less: Allowance for expected credit losses
Consolidated
2021
$’000
2020
$’000
614,635
380,882
(10,178)
(12,867)
(10,792)
(9,906)
591,590
360,184
The gross customer loan receivables and allowance for expected credit losses by portfolio for above are as follows:
Retail
Wholesale
Warehouse
Expected
credit loss
rate
2021
%
Expected
credit loss
rate
2020
%
Carrying
amount
2021
$’000
Carrying
amount
2020
$’000
Allowance
for expected
credit loss
2021
$’000
Allowance
for expected
credit loss
2020
$’000
3.0%
1.3%
1.3%
3.0%
1.1%
0.6%
285,060
297,563
46,671
282,904
69,265
14,054
8,449
599
3,819
9,033
786
87
614,635
380,882
12,867
9,906
Allowance for expected credit losses
The gross customer loan receivables by stages and allowance for expected credit losses provided for above are as follows:
Consolidated
Stage 1 – 12 month ECL
Stage 2 – Lifetime ECL‑not
credit impaired
Stage 3 – Lifetime ECL‑
credit impaired
Expected credit loss rate
Carrying amount
Allowance for expected
credit losses
2021
%
0.8%
2020
%
1.2%
2021
$’000
596,137
2020
$’000
363,111
2021
$’000
4,640
2020
$’000
4,446
35.5%
27.1%
15,024
16,392
5,327
4,439
83.5%
74.0%
3,474
1,379
614,635
380,882
2,900
12,867
1,021
9,906
Notes to the financial statements 31 March 2021Annual Report FY21 The maturity profile of gross customer loans are as follows:
less than 1 year
1 to 2 years
2 to 5 years
greater than 5 years
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Receivables written off during the year as uncollectable
Recoveries during the year
Closing balance
Impact of COVID-19
61
Consolidated
2021
$’000
14,173
46,116
2020
$’000
13,180
39,413
361,758
269,699
192,588
58,590
614,635
380,882
Consolidated
2021
$’000
9,906
6,342
(4,968)
1,587
12,867
2020
$’000
6,453
10,478
(8,335)
1,310
9,906
The ongoing economic impacts from the COVID‑19 pandemic have increased uncertainty in the estimation of ECL position.
While consumer credit performance in the six months to 31 March 2021 was strong, there is uncertainty as to whether removal of
JobKeeper and other support measures in the economy, as well as ongoing domestic and global impacts from the pandemic,
could see a deterioration in credit through 2021. To account for this risk, the Group is carrying a specific ECL provision amount
of $1,200,000 within the total ECL position, reflecting the recent volatile market environment and uncertain outlook.
Note 11. Other assets
Prepayments
GST receivable
Other assets
Prepayments also includes capitalised commission payments and warehouse facility costs.
Consolidated
2021
$’000
6,117
1,836
94
2020
$’000
1,495
794
145
8,047
2,434
62
Note 12. Property, plant and equipment
Leasehold improvements – at cost
Less: Accumulated depreciation
Fixtures and fittings – at cost
Less: Accumulated depreciation
Office equipment – at cost
Less: Accumulated depreciation
Consolidated
2021
$’000
2020
$’000
81
(59)
22
191
(73)
118
319
(164)
155
295
81
(38)
43
175
(54)
121
242
(103)
139
303
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 April 2019
Additions
Depreciation expense
Balance at 31 March 2020
Additions
Depreciation expense
Balance at 31 March 2021
Note 13. Right-of-use assets
Buildings – right‑of‑use assets
Less: Accumulated depreciation
Leasehold
improvements
$’000
Fixtures and
fittings
$’000
Office
equipment
$’000
65
–
(22)
43
–
(22)
21
133
7
(19)
121
16
(19)
118
112
72
(45)
139
78
(61)
156
Consolidated
2021
$’000
2,380
(1,771)
609
Total
$’000
310
79
(86)
303
94
(102)
295
2020
$’000
2,380
(1,278)
1,102
Additions to the right‑of‑use assets during the year were $nil (2020: $nil).
The low‑value assets expensed during the year was $35,000 (2020: $46,000).
The Group leases buildings for its offices under agreements of four years expiring on 30 April 2022.
Refer to note 17 for the details on the lease liabilities.
Notes to the financial statements 31 March 2021Annual Report FY21 Note 14. Intangibles
Website development – at cost
Less: Accumulated amortisation
Reconciliations
63
Consolidated
2021
$’000
417
(226)
191
2020
$’000
417
(90)
327
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 April 2019
Additions
Amortisation expense
Balance at 31 March 2020
Amortisation expense
Balance at 31 March 2021
Note 15. Other liabilities
Interest payable
GST payable
Accrued expenses
Subsidies received in advance
Other liabilities
Note 16. Borrowings
Investor funds on platform
Warehouse borrowings
Convertible notes
Website
$’000
21
396
(90)
327
(136)
191
Consolidated
2021
$’000
823
449
1,719
1,737
2,641
2020
$’000
81
506
1,158
1,767
1,301
7,369
4,813
Consolidated
2021
$’000
2020
$’000
348,234
374,609
281,250
–
18,500
8,873
629,484
401,982
Refer to note 23 for further information on financial instruments.
Investor funds on platform
Investor funds on platform relates to funding from retail and wholesale investors that have been matched against customer
loans as well as cash in trust bank accounts that are available for funding. Refer to note 8 for further information.
64
Note 16. Borrowings continued
Funding from retail investors
Funding from retail investors is governed by the constitution of the Group’s Retail Lending Platform and its product disclosure
statement. Funding on loans are for terms from six months to seven years and are most commonly for amounts less than $50,000.
Funding from wholesale investors
Funding from wholesale investors is in accordance with the provisions of the Trust Deed of the Group’s Wholesale Lending
Platform, the Information Memorandum relating to the Group’s Wholesale Lending Platform and Investor Mandate Agreements
entered into between members of the Group’s Wholesale Lending Platform (Members) and the Trustee. Funding are for
amounts up to $100,000 for terms from six months to seven years. Members are required to make a minimum investment of
$1,000,000 in the Trust, unless otherwise agreed by the Trustee and reflected in a Member’s Investment Mandate Agreement.
Warehouse borrowings
The Group has warehouse borrowings that provide funding for automotive loans (Plenti Funding Trust No. 1) and renewable and
personal loans (Plenti Funding Trust No. 2).
During the year the Plenti Funding Trust No. 1 facility limit was increased from $50 million to $350 million..
The Plenti Funding Trust No. 2 was incorporated in December 2020 to facilitate warehouse loan funding facility for personal and
renewable loans. Senior funding for the warehouse is provided by a major domestic bank and mezzanine funding is provided
by large domestic investors. The facility was initially sized at $100 million. Subsequent to the period, the Group received funder
approval to increase the facility size to $200 million on 4 May 2021.
Convertible notes
Convertible notes and the embedded derivative were exercised on IPO. The associated value of the convertible notes and
embedded derivative were transferred to share capital.
Total secured liabilities
The total secured liabilities are as follows:
Warehouse borrowings
Financing arrangements
Unrestricted access was available at the reporting date to the following warehouse facility:
Total facilities
Warehouse facilities *
Used at the reporting date
Warehouse facilities
Unused at the reporting date **
Warehouse facilities
Consolidated
2021
$’000
2020
$’000
281,250
18,500
Consolidated
2021
$’000
2020
$’000
434,500
47,500
281,250
18,500
153,250
29,000
*
The warehouse facilities limit excludes $15,510,000 (2020: $2,500,000) of funding provided by Plenti Finance Pty Ltd.
**
The unused amount of the warehouse facilities relates to amounts that are available for drawdown from funders but does not include cash on trust that has already
been drawn but has not yet been utilised for funding purposes. Refer to note 8 for further information.
Notes to the financial statements 31 March 2021Annual Report FY21 Note 17. Lease liabilities
Lease liability
Refer to note 23 for further information on financial instruments.
The weighted average incremental borrowing rate was 3.67% (2020: 3.67%).
Note 18. Derivative financial instruments
Cash flow hedges
Embedded derivatives
Refer to note 23 for further information on financial instruments.
Refer to note 24 for further information on fair value measurement.
Note 19. Provisions
Annual leave
Long service leave
Other provisions
Note 20. Issued capital
65
Consolidated
2021
$’000
702
2020
$’000
1,206
Consolidated
2021
$’000
13
–
13
2020
$’000
36
1,507
1,543
Consolidated
2021
$’000
852
99
100
1,051
2020
$’000
519
33
100
652
Ordinary shares – fully paid
168,923,531
21,333,074
105,934
42,328
Consolidated
2021
Shares
2020
Shares
2021
$’000
2020
$’000
66
Note 20. Issued capital continued
Movements in ordinary share capital
Details
Balance
Balance
IPO shares to existing shareholders (share split 6:1)
Convertible notes conversion
Initial public issuance of shares
Share issue costs
Exercise of share options
Balance
Ordinary shares
Date
1 April 2019
31 March 2020
Shares
Issue price
21,333,074
21,333,074
106,665,370
7,701,209
$’000
42,328
42,328
–
11,279
33,132,530
$1.6600
55,000
–
91,348
31 March 2021
168,923,531
(2,766)
93
105,934
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does
not have a limited amount of authorised capital.
On a show of hands, every member present at a meeting in person or by proxy shall have one vote and, upon a poll, each share
shall have one vote.
Redeemable preference shares
Redeemable preference shares entitle the holder the same rights as the holder of ordinary shares and are issued subject to
the Shareholders’ agreement and the Constitution, except as expressly set out in the Redeemable Convertible Preference
Share Terms.
Share buy‑back
There is no current on‑market share buy‑back.
Capital risk management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide
returns for shareholders and benefits for other stakeholders, and to maintain an optimum capital structure to reduce the cost
of capital.
Capital is regarded as total equity, as recognised in the statement of financial position.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
Note 21. Reserves
Hedging reserve – cash flow hedges
Share‑based payments reserve
Consolidated
2021
$’000
(13)
5,297
5,284
2020
$’000
(36)
1,437
1,401
Hedging reserve – cash flow hedges
The reserve is used to recognise the effective portion of the gain or loss of cash flow hedge instruments that is determined to be
an effective hedge.
Notes to the financial statements 31 March 2021Annual Report FY21 67
Share‑based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration,
and other parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 April 2019
Hedging loss
Share‑based payments expense
Balance at 31 March 2020
Hedging gain
Share‑based payments expense 1
Share options exercised
Balance at 31 March 2021
Hedging
reserve
$’000
Share-based
payments
reserve
$’000
–
(36)
–
(36)
23
–
–
856
–
581
1,437
–
3,942
(82)
(13)
5,297
Total
$’000
856
(36)
581
1,401
23
3,942
(82)
5,284
1. At IPO, vesting of the historical ESOP options were accelerated resulting in an additional share-based payments expense of $2,497,000 in the current period.
Note 22. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 23. Financial instruments
Financial risk management objectives
The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and liquidity
risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the financial performance of the Group.
Risk management is carried out by senior executives under policies approved by the Board of Directors (the Board).
These policies include identification and analysis of the risk exposure of the Group and appropriate procedures, controls and risk
limits.
Market risk
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group’s main interest rate risk arises from cash at bank, term deposits and borrowings. Cash at bank, term deposits and
borrowings obtained at variable rates expose the Group to interest rate risk. Cash at bank and term deposits obtained at fixed
rates expose the Group to fair value interest rate risk.
For the Group, the unitholder loans outstanding (note 16) are principal payment loans. The amount is not subject to interest rate
and thus not subject to interest rate risk.
68
Note 23. Financial instruments continued
As at the reporting date, the Group had the following variable rate cash at bank and term deposits outstanding:
Consolidated
Cash and cash equivalents
Restricted term deposit
Convertible notes
Net exposure to cash flow interest rate risk
2021
2020
Weighted
average
interest rate
%
0.05%
0.39%
–
Weighted
average
interest rate
%
0.63%
1.25%
10.00%
Balance
$’000
87,923
481
–
88,404
Balance
$’000
42,028
457
(8,873)
33,612
An official increase/decrease in interest rates of 50 (2020: 50) basis points would have an adverse/favourable effect on profit
before tax of $442,000 (2020: $168,000) per annum. The percentage change is based on the expected volatility of interest rates
using market data and analysts’ forecasts.
Borrowings from the warehouse facilities are variable rate borrowings where the interest rates are based on current market
rates. Interest rate risk is managed on these borrowings by entering into interest rate swaps, whereby the Group pays fixed rate
and receives floating rate interest payments. The contracts require settlement monthly of net interest receivable or payable.
The settlement dates coincide with the dates on which interest is payable on the underlying borrowing. The gain or loss from
remeasuring the hedging instruments at fair value is recognised in other comprehensive income and deferred in equity in the
cash flow hedge reserve, to the extent that the hedge is effective.
It is reclassified into the statement of profit or loss if the hedging relationship ceases. In the year ended 31 March 2021, nil
amounts were reclassified into profit or loss. There was no material hedge ineffectiveness in the current year.
The Group hedges a significant portion of the variability in future cash flows attributable to the interest rate risk on floating rate
borrowings using interest rate swaps. As at 31 March, the Group had a hedge ratio of 78%, however, the hedge was topped up
to over 90% in the immediate subsequent days in line with the Group’s hedging policy. There were no forecast transactions for
which cash flow hedge accounting had to be ceased as a result of the forecast transaction not occurring in the current period.
As at the reporting date, the Group had the following floating rate borrowings and the interest rate swap:
Floating rate borrowings
Interest rate swap notional amortised amount
Consolidated
2021
$’000
2020
$’000
281,250
18,500
(218,549)
(10,000)
The Group also has indirect exposure to interest rate fluctuations via the fees it generates on funds invested in the lending
platforms it manages. The Group charges Plenti Lending Platform investors a fee of 10% of interest they receive from borrowers.
If market interest rates reduce and if as a result the rate required by investors on this lending platform reduces, this will have an
impact on the Group’s income over time. This will, however, only impact new loans and existing variable rate loans as the rate on
existing fixed rate loans will not change.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
All credit decisions are governed by product level credit policies prescribing how prospective customers are assessed including
obtaining 3rd party credit reporting data, responsible lending obligations and setting appropriate credit/loan limits. The Group
obtains security in respect of loans in some circumstances to mitigate credit risk. The maximum exposure to credit risk at the
reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as
disclosed in the statement of financial position and notes to the financial statements. The Group does not hold any collateral.
As disclosed in note 1, the Group has applied a PD x EAD x LGD approach in estimating expected credit losses on customer
loans (note 10) and is based on assumptions as detailed in note 2. These assumptions include the assessed credit worthiness
of the borrower.
Notes to the financial statements 31 March 2021Annual Report FY21 69
Where there has been a significant increase in the credit risk of a customer loan since origination, the allowance will be based
on the lifetime expected credit loss. The Group uses a rebuttable presumption that a significant deterioration in credit risk exists
when contractual payments are more than 30 days past due (i.e. ECL model Stage 2).
Where there has been objective evidence of impairment for a customer loan, the allowance will be based on lifetime expected
credit loss. In certain cases, a customer loan will be considered in default when internal or external information indicate that the
Group is unlikely to receive the outstanding contractual amount in full (i.e. ECL model Stage 3).
The definition of default used in measuring ECLs is aligned to the definition used for internal credit risk management purposes
across all portfolios. Default occurs when there are indicators that a borrower is unlikely to meet contractual credit obligations
to the Company in full, or the borrower is a minimum of 90 days past due. Loans are classified as credit impaired where there is
doubt as to whether the full amounts due, including interest and other payments, will be received in a timely manner. Loans are
written‑off when there is no realistic probability of recovery or at 180 days past due.
Recovery prospects may include but are not limited to primary security (realisation of the underlying receivable assets or other
business balance sheet assets) or secondary security (including but not limited to pursuing personal guarantors or mortgages).
For loans funded from the Retail Lending Platform, retail investors can recover credit losses from the Provision Fund, as described
in note 8. This recovery process does alter the level of credit losses reported by the Group given that the Provision Fund is
consolidated within the financials of the Group and hence the recovery of credit losses by retail investors is funded by cash held
within the Group.
The Group has no significant concentration of credit risk with any single counterparty or group of counterparties.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents) and
available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and by continuously monitoring actual and forecast
cash flows and matching the maturity profiles of financial assets and liabilities.
Financing arrangements
Unused borrowing facilities at the reporting date:
Warehouse facilities
Consolidated
2021
$’000
2020
$’000
153,250
29,000
As is customary with warehouse facilities, availability of the facility requires periodic extension with consent of the existing
funders, or replacement of any funder who does not wish to extend.
The Plenti Funding Trust No. 1 has a 12 month availability period and is due for extension by December 2021. If the warehouse is
not extended it will enter an amortisation period. The warehouse can also be placed into amortisation at any time during its life if
there is a breach of certain warehouse terms leading to a stop funding event.
The Plenti Funding Trust No. 2 has an 18 month availability period and is due for extension by 30 June 2022. It contains similar
provisions relating to amortisation in the event it is not extended or where there are breaches of material terms of the warehouse
facility agreement.
Remaining contractual maturities
The following tables detail the Group’s remaining contractual maturity for its financial instrument liabilities. The tables have been
drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities
are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities
and therefore these totals may differ from their carrying amount in the statement of financial position.
70
Note 23. Financial instruments continued
Consolidated – 2021
Non-derivatives
Non-interest bearing
Trade payables
Subsidies received in advance
Other liabilities
Interest-bearing
Unitholder liabilities
Warehouse borrowings
Lease liability
Total non-derivatives
Derivatives
1 year
or less
$’000
Between
1 and 2 years
$’000
Between
2 and 5 years
$’000
Over 5 years
$’000
Remaining
contractual
maturities
$’000
4,635
1,737
2,641
178,025
218,039
702
–
–
–
–
–
–
–
–
–
179,637
68,934
–
309,781
51,936
–
–
–
–
4,635
1,737
2,641
719,379
286,973
702
405,779
248,571
309,781
51,936
1,016,067
Interest rate swaps net settled
Total derivatives
13
13
–
–
–
–
–
–
13
13
Consolidated – 2020
Non-derivatives
Non-interest bearing
Trade payables
Subsidies received in advance
Other liabilities
Interest-bearing
Unitholder liabilities
Warehouse borrowings
Convertible notes payable
Lease liability
Total non-derivatives
Derivatives
Embedded derivatives
Total derivatives
1 year
or less
$’000
Between
1 and 2 years
$’000
Between
2 and 5 years
$’000
Over 5 years
$’000
Remaining
contractual
maturities
$’000
3,448
1,767
1,301
–
–
–
–
–
–
–
–
–
3,448
1,767
1,301
145,224
114,364
158,112
12,177
429,877
18,914
–
538
–
–
541
–
11,722
127
–
–
1
18,914
11,722
1,207
171,192
114,905
169,961
12,178
468,236
–
–
–
–
1,543
1,543
–
–
1,543
1,543
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Notes to the financial statements 31 March 2021Annual Report FY21 71
Note 24. Fair value measurement
Fair value hierarchy
The following tables detail the Group’s assets and liabilities, measured or disclosed at fair value, using a three level hierarchy,
based on the lowest level of input that is significant to the entire fair value measurement, being:
■ Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
■ Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly
■ Level 3: Unobservable inputs for the asset or liability
Consolidated – 2021
Assets
Cash flow hedges
Total assets
Consolidated – 2020
Liabilities
Cash flow hedges
Embedded derivatives
Total liabilities
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
13
13
–
–
–
–
Level 1
$’000
Level 2
$’000
Level 3
$’000
36
–
36
–
1,507
1,507
–
–
–
13
13
Total
$’000
36
1,507
1,543
Embedded derivatives related to the conversion option that was available to the convertible note holders. The conversion option
was exercised on IPO and hence this amount does not appear on the balance sheet at 31 March 2021. The value of the derivative
at the time of conversion to equity was $1,917,000.
There were no transfers between levels during the financial year.
Valuation techniques for fair value measurements categorised within level 2 and level 3
Unquoted investments have been valued using a discounted cash flow model.
Note 25. Key management personnel disclosures
Directors
The following persons were directors of Plenti Group Limited during the financial year:
Mary Ploughman – Non‑Executive Director
Daniel Foggo – Chief Executive Officer
Susan Forrester AM – Non‑Executive Director
Martin Dalgleish – Non‑Executive Director
Peter Behrens – Non‑Executive Director
Other key management personnel
The following persons also had the authority and responsibility for planning, directing and controlling the major activities of the
Group, directly or indirectly, during the financial year:
Miles Drury – Chief Financial Officer
Benjamin Milsom – Chief Commercial Officer
Glenn Riddell – Chief Operating Officer
72
Note 25. Key management personnel disclosures continued
Compensation
The aggregate compensation made to directors and other members of key management personnel of the Group is set out below:
Short‑term employee benefits
Post‑employment benefits
Long‑term benefits
Share‑based payments
Consolidated
2021
$
2020
$
1,450,805
1,009,566
129,369
54,305
92,251
–
1,687,495
124,963
3,321,974
1,226,780
Investments in the Retail Lending Platform
The amount of investments made to the Retail Lending Platform by the directors and key management personnel is set out below:
Consolidated
2021
$
2020
$
3,061,796
2,002,141
259,089
3,137
3,320,885
2,005,278
Directors
Other key management personnel
Note 26. Related party transactions
Parent entity
Plenti Group Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 29.
Key management personnel
Disclosures relating to key management personnel are set out in note 25 and the remuneration report included in the directors’
report.
Transactions with related parties
There were no transactions with related parties during the current and previous financial year.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Unitholder liabilities
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
2021
$
2020
$
348,224,304
374,609,022
Notes to the financial statements 31 March 2021Annual Report FY21 Note 27. Remuneration of auditors
Audit and review of financial reports
Group
Controlled entities
Other assurance services
AFSL and Compliance plan
Investigating accounting report
Tax due diligence report
CEFC compliance report
Other services
Tax compliance services
Tax advisory services
Total services provided by Grant Thornton
Note 28. Contingent liabilities
73
Consolidated
2021
$
2020
$
79,470
109,500
188,970
10,800
194,150
54,032
2,750
261,732
42,900
13,500
56,400
507,102
53,500
75,065
128,565
10,670
–
–
2,535
13,205
23,587
–
23,587
165,357
The Group has given bank guarantees as at 31 March 2021 of $352,000 (2020: $352,000) to Perpetual Trustee Company Limited
and KI Martin Place Pty Ltd. This is secured by the term deposit held by the Group.
The Group has given collateral security as at 31 March 2021 of $120,000 (2020: $95,000) to the superannuation clearing house as a
Transaction Negotiation Authority relating to payment of superannuation.
The Group has given bank guarantees as at 31 March 2021 of $9,529 (2020: $9,529) to Epworth Building Pty Limited. This is secured
by the term deposit held by the Group.
Note 29. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 1:
Name
Plenti Pty Limited
Plenti RE Limited
– The Trustee for Plenti Provision Fund*
– The Trustee for Plenti Lending Platform*
– The Trustee for Plenti Wholesale Lending Platform*
Plenti Early Access Provider Pty Limited
– The Trustee for Plenti Subvention Trust
– The Trustee for Plenti Early Access Facility Trust
Plenti Finance Pty Limited
– Ratesetter Funding Trust No 1
– Plenti Funding Trust No 2
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ownership interest
2021
%
100.0%
100.0%
–
1.1%
0.8%
2020
%
100.0%
100.0%
–
0.7%
0.9%
100.0%
100.0%
99.9%
99.9%
100.0%
100.0%
100.0%
99.9%
99.9%
100.0%
100.0%
–
*
Management have determined that the Company controls the subsidiaries, Plenti Lending Platform, Plenti Wholesale Lending Platform and the Plenti Provision
Fund, even though it holds less than half of the voting rights of these entities. This is because the Company has the power to direct the relevant activities of these
subsidiaries, has the rights to variable returns from its involvement with these subsidiaries and has the decision making right over the subsidiaries.
74
Note 30. Deed of cross guarantee
The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the others:
Plenti Group Limited
Plenti Pty Limited
The deed of cross guarantee was executed and approved by the Board on 19 March 2021.
By entering into the deed, the wholly‑owned entities have been relieved from the requirement to prepare financial statements
and directors’ report under Corporations Instrument 2016/785 issued by the Australian Securities and Investments Commission.
The above companies represent a ‘Closed Group’ for the purposes of the Corporations Instrument, and as there are no other parties
to the deed of cross guarantee that are controlled by Plenti Group Limited, they also represent the ‘Extended Closed Group’.
Set out below is a consolidated statement of profit or loss and other comprehensive income and statement of financial position
of the ‘Closed Group’.
Statement of profit or loss and other comprehensive income
Interest revenue
Other income
Transaction costs
Depreciation and amortisation expense
Funding costs
Sales and marketing expense
Product development expense
General and administration expense
Loss before income tax expense
Income tax expense
Loss after income tax expense
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Equity – accumulated losses
Retained profits at the beginning of the financial year
Loss after income tax expense
Accumulated losses at the end of the financial year
2021
$’000
1,619
12,056
(3,682)
(745)
(546)
(8,859)
(5,239)
(16,995)
(22,391)
–
(22,391)
–
(22,391)
2021
$’000
–
(22,391)
(22,391)
Notes to the financial statements 31 March 2021Annual Report FY21 Statement of financial position
Assets
Cash and cash equivalents
Term deposits
Trade receivables
Other assets
Property, plant and equipment
Right‑of‑use assets
Intangibles
Total assets
Liabilities
Trade payables
Provisions
Other liabilities
Lease liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
75
2021
$’000
22,590
482
17,131
14,945
294
609
191
56,242
1,145
1,051
3,755
702
6,653
49,589
107,357
5,297
(63,065)
49,589
76
Note 31. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Loan impairment expense
Share‑based payments
IPO costs
Other non‑cash items
Change in operating assets and liabilities:
Decrease/(increase) in customer loans
Decrease/(increase) in trade receivables
Increase in other operating assets
Increase in trade payables
Increase in other operating liabilities
Net cash used in operating activities
Note 32. Changes in liabilities arising from financing activities
Consolidated
2021
$’000
2020
$’000
(15,092)
(16,232)
745
7,100
3,942
2,327
544
(615)
296
(5,613)
1,568
1,876
705
10,716
581
–
186
1,198
(218)
(1,506)
489
1,901
(2,922)
(2,180)
Consolidated
Balance at 1 April 2019
Proceeds from borrowings
Repayment of borrowings
Interest
Embedded derivatives
Other changes
Balance at 31 March 2020
Proceeds from borrowings
Investor funds
on loan
$’000
Warehouse
borrowings
$’000
Convertible
notes
$’000
Lease
liabilities
$’000
261,576
224,956
(110,740)
–
–
(1,183)
–
–
18,500
10,083
–
–
–
–
–
297
(1,507)
–
8,873
–
374,609
18,500
166,678
262,750
1,206
403,188
–
429,428
Total
$’000
263,292
253,539
(111,304)
351
(1,507)
(1,183)
1,716
–
(564)
54
–
–
Repayment of borrowings
(193,090)
Interest
Other changes
–
37
–
–
–
Balance at 31 March 2021
348,234
281,250
(8,873)
(557)
(202,520)
–
–
–
53
–
53
37
702
630,186
Notes to the financial statements 31 March 2021Annual Report FY21
Note 33. Earnings per share
Loss after income tax attributable to the owners of Plenti Group Limited
77
Consolidated
2021
$’000
2020
$’000
(15,092)
(16,232)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
149,957,320
127,998,444
Weighted average number of ordinary shares used in calculating diluted earnings per share
149,957,320
127,998,444
Basic earnings per share
Diluted earnings per share
Cents
(10.06)
(10.06)
Cents
(12.68)
(12.68)
9,990,000 (2020: 9,430,008) options were excluded from the weighted average number of ordinary shares used in calculating
diluted earnings per share as they were anti‑dilutive.
Note 34. Share-based payments
Share‑based payments for the Group relate to securities issued under the Employee Share Option Plan adopted in 2015
(Historic ESOP) and the Plenti Group Limited Employee Equity Plan adopted in 2020 (2020 EEP). The Historic ESOP and 2020 EEP
were and are intended to allow the Group to attract and retain skilled and experienced employees, motivate them to drive Group
performance and reward them for delivery of results.
Historic ESOP
The Company has made a grant of options under the Historic EOSP in each of the financial years 2016, 2017, 2018, 2019, 2020 and
2021. As at 31 March 2021, 9,990,000 (2020: 1,571,665) options are held under the Employee Plan on the following terms subject to
the Historic ESOP rules:
■ each option gives the right to subscribe for or acquire one ordinary share in the Company;
■ nil consideration is payable for the option grant;
■ exercise price is variable for each option grant.
Under the terms of the Historic ESOP all outstanding options vested upon IPO of the Company on 23 September 2020.
No further options are intended to be issued under the Historic ESOP with all new share‑based payments to be made under the
2020 EEP.
78
Note 34. Share-based payments continued
Set out below are summaries of options granted under the Historic ESOP:
2021
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
16/10/2015
31/05/2022
$0.5000
950,004
14/03/2016
31/05/2022
$0.5000
390,000
01/04/2016
31/05/2022
$0.5000
180,000
16/02/2017
31/05/2022
$0.8250
80,004
31/03/2017
31/05/2022
$0.8250
989,994
09/06/2017
31/05/2022
$0.8250
300,000
20/09/2017
31/05/2022
$0.9567
120,000
23/11/2017
31/05/2022
$0.9567
100,002
22/01/2018
31/05/2022
$0.9567
30,000
01/04/2018
31/05/2022
$0.9567
770,004
05/05/2018
31/05/2022
$0.9567
270,000
01/08/2018
31/05/2022
$1.3333
60,000
03/09/2018
31/05/2022
$1.3333
120,000
03/12/2018
31/05/2022
$1.3833
120,000
06/05/2019
31/05/2022
$1.3833
840,000
01/06/2019
31/05/2022
$1.3833
360,000
01/08/2019
31/05/2022
$1.3833
120,000
01/12/2019
31/05/2022
$1.3833
540,000
02/12/2019
31/05/2022
$1.3833
210,000
13/01/2020
31/05/2022
$1.3833
2,310,000
19/02/2020
31/05/2022
$1.3833
240,000
20/03/2020
31/05/2022
$1.3833
30,000
31/03/2020
31/05/2022
$1.3833
300,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
08/07/2020
31/05/2022
22/07/2020
31/05/2022
$1.3833
$1.3833
–
–
390,000
600,000
(40,002)
–
–
(80,004)
(99,996)
–
–
–
–
(20,004)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
910,002
390,000
180,000
–
889,998
300,000
120,000
100,002
30,000
750,000
270,000
60,000
120,000
120,000
840,000
360,000
120,000
(100,002)
439,998
–
210,000
(90,000)
2,220,000
–
–
–
–
–
240,000
30,000
300,000
390,000
600,000
9,430,008
990,000
(240,006)
(190,002)
9,990,000
In late August 2020, share options were impacted as part of the overall pre‑IPO restructure. All of the issued share options were
multiplied by a factor of 6 and the corresponding exercise price divided by 6 (rounded to 4 decimal places).
All of the vesting dates were accelerated at IPO so all options have vested.
The Board has determined that the last exercise date is 31 May 2022 for all options outstanding.
Notes to the financial statements 31 March 2021Annual Report FY21 2020
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
16/10/2015
31/03/2021
$0.5000
950,004
14/03/2016
31/03/2022
$0.5000
390,000
01/04/2016
31/03/2022
$0.5000
180,000
16/02/2017
31/03/2022
$0.8250
80,004
31/03/2017
31/03/2023
$0.8250
1,069,998
09/06/2017
31/03/2023
$0.8250
300,000
20/09/2017
31/03/2023
$0.9567
120,000
23/11/2017
31/03/2023
$0.9567
300,000
22/01/2018
31/03/2023
$0.9567
90,000
01/04/2018
31/03/2024
$0.9567
890,004
05/05/2018
31/03/2024
$0.9567
270,000
01/08/2018
31/03/2024
$1.3333
60,000
03/09/2018
31/03/2024
$1.3333
120,000
03/12/2018
31/03/2024
$1.3833
120,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
06/05/2019
31/03/2024
01/06/2019
31/03/2025
01/08/2019
31/03/2024
01/12/2019
31/03/2024
02/12/2019
31/03/2024
13/01/2020
31/03/2030
19/02/2020
31/03/2030
20/03/2020
31/03/2030
31/03/2020
31/03/2030
$1.3833
$1.3833
$1.3833
$1.3833
$1.3833
$1.3833
$1.3833
$1.3833
$1.3833
–
–
–
–
–
–
–
–
–
900,000
360,000
120,000
600,000
210,000
2,310,000
240,000
30,000
300,000
4,940,010
5,070,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
79
Expired/
forfeited/
other
Balance at
the end of
the year
–
–
–
–
950,004
390,000
180,000
80,004
(80,004)
989,994
–
–
300,000
120,000
(199,998)
100,002
(60,000)
30,000
(120,000)
770,004
–
–
–
–
270,000
60,000
120,000
120,000
(60,000)
840,000
–
–
360,000
120,000
(60,000)
540,000
–
–
–
–
–
210,000
2,310,000
240,000
30,000
300,000
(580,002)
9,430,008
All of the share options were multiplied by a factor of 6 and the corresponding exercise price divided by 6 (rounded to 4 decimal
places) to be comparable with the current year.
All options outstanding are exercisable at the end of the financial year.
The weighted average share price and exercise price during the financial year was $1.13 (2020: $1.10).
The weighted average remaining contractual life of options outstanding at the end of the financial year was 1.17 years
(2020: 5.27 years).
The share‑based payment expense during the financial year was $3,942,000 (2020: $581,000) of which $3,603,000 (2020:
$581,000) related to the Historic ESOP. Of the FY21 expense, $2,497,000 related to accelerated vesting of options at IPO.
80
Note 34. Share-based payments continued
For the options granted during the current and previous financial year, the valuation model inputs used to determine the fair
value at the grant date, are as follows:
Grant date
Expiry date
Share price
at grant date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value
at grant date
06/05/2019
31/03/2024
$1.3833
$0.9567
50.00%
01/06/2019
31/03/2025
$1.3833
$0.9567
50.00%
01/08/2019
31/03/2024
01/12/2019
31/03/2024
$1.3833
$1.3833
$1.3333
$1.3333
50.00%
50.00%
02/12/2019
31/03/2024
$1.3833
$1.3833
50.00%
13/01/2020
31/03/2030
$1.3833
$1.3833
50.00%
09/02/2020
31/03/2030
$1.3833
$1.3833
50.00%
20/03/2020
31/03/2030
$1.3833
$1.3833
50.00%
31/03/2020
31/03/2030
$1.3833
$1.3833
50.00%
08/07/2020
31/03/2030
$1.3833
$1.3833
50.00%
22/07/2020
31/03/2030
$1.3833
$1.3833
50.00%
–
–
–
–
–
–
–
–
–
–
–
1.40%
1.16%
0.86%
0.43%
0.43%
0.87%
0.75%
0.45%
0.45%
0.30%
0.30%
$0.475
$0.538
$0.450
$0.417
$0.417
$0.492
$0.482
$0.472
$0.470
$0.507
$0.503
2020 EEP
The 2020 EEP was implemented in August 2020, shortly prior to the IPO of the Group, to provide for ongoing equity‑based
remuneration of employees in the listed environment. Granting of share rights under the Group’s short‑term incentive plan and
long‑term incentive plan (as described further in the Remuneration Report) is facilitated by the 2020 EEP. As at 31 March 2021,
a total of 895,994 rights to fully paid ordinary shares have been issued under the 2020 EEP, subject to the following conditions:
■ achievement of applicable performance hurdles over the relevant performance period
■ continued employment with the Group until the vesting date of the relevant tranche
In the financial year, a total share based payment expense of $339,000 was recognised in relation to issuance of share rights
under the 2020 EEP (2020: nil).
Grant date
18/09/2020
01/10/2020
08/12/2020
Share rights
issued
Fair value at
grant date
210,843
512,047
173,104
$1.66
$1.66
$1.13
The fair value for the grants in September and October was the IPO price. Fair value for the grant in December was determined
based on a 10‑day volume weighted average trading price of Plenti shares.
Notes to the financial statements 31 March 2021Annual Report FY21 Note 35. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Other comprehensive income for the year, net of tax
Total comprehensive loss
Statement of financial position
Total current assets
Total non‑current assets
Total assets
Total current liabilities
Total non‑current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
81
Parent
2021
$’000
(438)
–
(438)
Parent
2021
$’000
66,995
1,423
68,418
444
–
444
67,974
105,934
(37,522)
(438)
67,974
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 31 March 2021.
Contingent liabilities
The parent entity had no contingent liabilities as at 31 March 2021.
Capital commitments – Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 31 March 2021.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1, except for the following:
■ Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
■ Investments in associates are accounted for at cost, less any impairment, in the parent entity.
■ Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator
of an impairment of the investment.
Note 36. Events after the reporting period
No matter or circumstance has arisen since 31 March 2021 that has significantly affected, or may significantly affect the Group’s
operations, the results of those operations, or the Group’s state of affairs in future financial years.
82
Directors’ declaration
31 March 2021
In the directors’ opinion:
■ the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
■ the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1 to the financial statements;
■ the attached financial statements and notes give a true and fair view of the Group’s financial position as at 31 March 2021 and
of its performance for the financial year ended on that date;
■ there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable; and
■ at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group will
be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee
described in note 30 to the financial statements.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
Daniel Foggo
Director
24 May 2021
Sydney
Mary Ploughman
Director
Annual Report FY21
Independent auditor’s report
to the members of Plenti Group Limited
83
Level 17, 383 Kent Street
Sydney NSW 2000
Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Plenti Group Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Plenti Group Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 31 March 2021, the consolidated statement of profit or
loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash
flows for the financial year then ended, and notes to the consolidated financial statements, including a summary of
significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 31 March 2021 and of its performance for the financial
year ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
#5308793v4
84
Independent auditor’s report
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
Initial Public Offering (IPO) accounting
The Group listed on the Australian Securities Exchange (ASX) on 23 September
2020.
To facilitate the IPO there was a reorganisation of the legal corporate structure.
The restructure is considered to be a capital reorganisation that was accounted for
as a continuation of the pre-IPO Plenti Group, as disclosed in Note 1. As part of
the reorganisation, significant transaction costs were incurred.
The introduction of a 'top hat' to the group prior to listing whilst common is a
business combination transaction outside the scope of AASB 3 Business
Combinations.
The process is inherently complex and there is an accounting policy choice on how
the group's financial reporting is presented. As a result, this is a key audit matter
due to complexity and judgements involved within the assessment of the
transaction being outside of the scope of AASB 3 Business Combinations and
requires a choice of accounting policy on how the group’s financial reporting is
presented as well as the treatment of any related costs.
Customer loan recoverability
As at 31 March 2021, the Group recognised $12.9m of expected credit loss (ECL)
provisions in accordance with AASB 9 Financial Instruments as disclosed in Note
10.
The recoverability of the loan carrying values is impacted by the quality of the loan
assessment and origination process, the value of security held, the performance of
the loan book and factors external to the Group such as economic conditions.
Under AASB 9, entities need to perform forward looking analysis in order to
identify internal and external factors that may impact expected credit losses which
required significant management judgement.
The accounting standard also requires more detailed analysis on assets that have
experienced a significant deterioration in credit quality based on a 3-stage model.
The Covid-19 pandemic continues to be a significant influence to the economy,
and so consideration is required for the economic impact such as an additional
overlay to the ECL allowance.
This process is inherently complex and requires a level of judgement and
assumptions and is therefore considered important to the audit. We have
determined this is a key audit matter as this assessment requires the exercise of
significant judgement about internal and external factors that may impact expected
credit losses.
How our audit addressed the key audit
matter
Our procedures included, amongst others:
Agreeing the recorded proceeds from
the issuance of shares to supporting
documentation;
Agreeing a sample of transaction costs
to supporting documentation and
assessing whether they were
capitalised in accordance with the
Group's accounting policy and the
accounting standards; and
Assessing the accounting applied for
the introduction of Plenti Group Limited
as the new head company into the
Group structure is in accordance with
the Group's accounting policy and the
accounting standards.
Our procedures included, amongst others:
Proving mathematical accuracy of the
ECL model and testing inputs to
support;
Assessing the appropriateness of
assumptions used in the model in
relation to external and internal factors.
This included an analysis of the
reasonableness of assumptions in the
ECL model when compared to
historical loan book performance, other
financial institutions and market
commentary;
Preparing a sensitivity analysis of the
ECL model, including management’s
Covid-19 overlay;
Comparing classification and
measurement assessment for all
financial assets and liabilities; and
Comparing the disclosures relating to
accounting estimates for compliance
with AASB 7 Financial Instruments:
Disclosures and AASB 9.
Annual Report FY21
85
Revenue recognition
The Group reported interest income of $38.8m for the year ended 31 March 2021
and reported net loans receivable of $591.6m at year end. Interest income on
customer loans is determined using the effective interest rate (EIR) method in
accordance with AASB 9 Financial Instruments. The Group’s disclosure over the
effective interest rate is disclosed in Note 4.
The EIR is used for revenue recognition and will encompass any fees or other
charges that are incurred by a customer at the time of acquiring a loan asset by
the Group. Consequently, these fees (or expenses) are not recognised at the time
the cash is collected but over the life of the loan asset contract. Significant
judgement is required in determining which fees and charges qualify for the EIR
method and over which period of time the fees are recognised.
The EIR model is both a manual and complex model and may be subject to
arithmetical errors.
This process is inherently complex and requires a level of judgement and manual
processing and is therefore considered important to the audit. We have
determined this is a key audit matter as this assessment requires the exercise of
significant judgement and manual processing.
Our procedures included, amongst others:
Assessing the policy of revenue
recognition for any new lines of
revenue and comparing to
requirements of the accounting
standards;
Obtaining management's EIR model
and proving mathematical accuracy;
Inspecting a sample of loan contracts
and verifying the fees and charges as
part of the loan contract;
Obtaining management's effective life
model for loans and proving
mathematical accuracy;
Inspecting a sample of loan contracts
and verifying their start and end dates
agree to data in the effective life
model;
Inspecting and analysing EIR
accounting entries; and
Comparing financial report disclosures
to requirements of AASB 9 and AASB
101 Presentation of Financial
Statements.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 31 March 2021, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
86
Independent auditor’s report
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: https://www.auasb.gov.au/auditors_responsibilites/ar1_2020.pdf. This description forms part of
our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 32 to 41 of the directors’ report for the financial year ended
31 March 2021.
In our opinion, the Remuneration Report of Plenti Group Limited for the financial year ended 31 March 2021 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
M A Adam-Smith
Partner – Audit & Assurance
Sydney, 24 May 2021
Annual Report FY21
Additional Information
Shareholder information
Corporate directory
87
88
90
“
Working with Plenti has been a significant boost to
our sales process and really helped us offer our
customers the best possible finance solutions.
Plenti offers the complete package with attractive finance options, convenient
application processes and integrated systems that make the entire process
fast and friendly. They have a friendly customer‑focused approach and are
partners we are very happy to put forward to our customers. ”
Kyle Jenkins, Chief Operating Officer
Clipsal Solar, Schneider Electric Venture
88
Shareholder information
31 March 2021
The shareholder information set out below was applicable as at 30 April 2021.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Ordinary shares
Options over ordinary shares
Number
of holders
% of total
shares
issued
Number
of holders
% of total
shares
issued
277
1,477
293
413
102
2,562
47
0.11
2.00
1.31
6.78
89.80
100.00
–
–
–
–
28
30
58
–
–
–
–
12.41
87.59
100.00
–
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
MARJORIE JEAN FOGGO & VERITAS (2012) LIMITED
CARSALES.COM LIMITED
EQUITY TRUSTEES LIMITED
CARSALES FINANCE PTY LTD
FIVE V BARE NOMINEE NUMBER 2 PTY LTD
MYER FAMILY INVESTMENTS LIMITED
FIVE V FUND II LP
D'AZUR HOLDINGS PTY LTD
JAMES ANTHONY CARNIE & LUCY ANNABEL HARRIET MILSOM
ROBYN LESLEY BARNETT SIMON GLENN RIDDELL
UBS NOMINEES PTY LTD
ORCHID EQUITY LIMITED
BIRDSONG CAPITAL LIMITED
ANDREW WADE JONES
CORUNNA ASSET MANAGEMENT LIMITED
STURT CAPITAL PTY LTD
GPMG HOLDINGS LIMITED
WILBOW GROUP PTY LTD
CITICORP NOMINEES PTY LIMITED
CS THIRD NOMINEES PTY LIMITED
ANTHONY RHYDIAN LEWIS
Ordinary shares
Number held
35,417,643
10,716,378
7,388,027
5,368,908
5,228,253
4,463,134
4,461,590
4,372,159
4,068,000
4,068,000
3,750,518
3,652,098
3,177,595
3,055,212
2,900,676
2,879,868
2,725,374
2,662,411
2,640,919
2,420,000
2,087,880
% of total
shares
issued
20.97
6.34
4.37
3.18
3.10
2.64
2.64
2.59
2.41
2.41
2.22
2.16
1.88
1.81
1.72
1.70
1.61
1.58
1.56
1.43
1.24
117,504,643
69.56
Annual Report FY21 Unquoted equity securities
Options over ordinary shares issued
Substantial holders
Substantial holders in the Company are set out below:
89
Number
on issue
Number
of holders
9,990,000
58
Ordinary shares
Number held
% of total
shares
issued
MARJORIE JEAN FOGGO & VERITAS (2012) LIMITED < WESTBOURNE A/C >
35,417,643
20.97
CARSALES COM LIMITED
CARSALES FINANCE PTY LTD1
FIVE V BARE NOMINEE NUMBER 2 PTY LTD2
FIVE V FUND II LP2
Note:
1. Related entity to Carsales Limited.
2. Related entities which combined are a substantial shareholder with over 5% of total shares issued.
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
10,716,378
5,368,908
5,228,253
4,461,590
6.34
3.18
3.10
2.64
On a show of hands every member present at a meeting in person or by proxy shall have one vote and, upon a poll, each share
shall have one vote.
There are no other classes of equity securities.
Securities subject to voluntary escrow
Class
Expiry date1
Fully paid ordinary shares
4.15pm on the Trading Day on which the Company’s
full‑year results for FY2022 are released to the ASX
Number
of shares
131,167,046
Note:
1. The expiry date is the last day that the remaining escrowed shares can be released.
90
Corporate directory
31 March 2021
Directors
Mary Ploughman
Daniel Foggo
Susan Forrester AM
Martin Dalgleish
Peter Behrens
Company secretaries
Euh (David) Hwang
Benjamin Milsom
Registered office and principal place of business
Level 5
14 Martin Place
Sydney NSW 2000
Share register
Automic Pty Limited
Level 5/126 Phillip Street
Sydney NSW 2000
Auditor
Grant Thornton Audit Pty Ltd
Level 17
383 Kent Street
Sydney NSW 2000
Stock exchange listing
Plenti Group Limited shares are listed on the Australian Securities Exchange (ASX code: PLT)
Website
www.plenti.com.au
Corporate Governance Statement
www.plenti.com.au/shareholders/corporate‑governance
Annual Report FY21 www.plenti.com.au