TIDMZAIM
RNS Number : 5680E
ZAIM Credit Systems PLC
09 November 2020
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For Immediate Release
9 November 2020
Zaim Credit Systems Plc
("Zaim" or the "Group")
Third quarter 2020 trading update
Zaim Credit Systems plc (the 'Group' or 'Zaim'), the Russian
focused fintech group providing financial inclusion for those
consumers who are not well served by mainstream lenders, announces
a post period end trading update from its wholly owned subsidiary,
Zaim-Express LLC, ('Zaim-Express') in respect of the third quarter
of the financial year ended 31 Dec 2020.
Highlights[1]:
-- Outstanding growth of amount funded online of 327% from
GBP378k in Q2 2020 to GBP1,153k in Q3 2020
-- Strong recovery in amount funded to GBP2,307k in Q3 2020
representing increase of 42.3% vs. Q2 2020 (an increase of 4.3% on
Q3 2019)
-- Covid-19 has resulted in a significant acceleration of the
migration of the business model to online - positive for business
growth and margins
-- Online now represents largest portion of the business
accounting for 59% of the amounts funded in September 2020
-- During Q3 the Group traded profitably, was cash flow positive
and is experiencing rapid growth
-- Continued enhancements to the credit scoring process has
resulted in the weighted average default rate improving from 13.6%
in Q1 to 12.1% in Q2
-- Generated positive operating cash flow of GBP149k in Q3 2020
vs. negative GBP178k in Q2 2020, which the Board believes
demonstrates that the growth of amounts funded is healthy, solid
and self-sustaining, which gives us good confidence in the
long-term sustainability of our strategy
-- Zaim's cash position increased by GBP195k in September to
GBP433k, despite the significant amounts reinvested into growing
the loan book
-- Q4 is expected to see continued growth in the online segment
combined with slight improvements in the default rates as a result
of ongoing advancements to the credit scoring process
Siro Cicconi, Zaim's CEO commented:
" We are pleased to announce that Company has achieved its first
relevant milestone: our online platform comprising the most
significant part of the business for the first time in the Group's
history. The business is currently trading profitably, cash-flow
positive and its growth pace is solid and consistent driven by the
online segment. This is the confirmation of positive trends we
observed in the previous quarters and I am glad to note that these
results go beyond our expectations.
All key performance indicators show positive trends: double
digit monthly growth rates in amounts funded comes along with a
decrease in the weighted average default rate, profit generation
and positive cash-flow generation. All these achievements are made
possible thanks to the highly professional work undertaken by our
team on the evolution of our bespoke IT system and day-by-day
operational management.
The figures don't show how quickly and professionally the team
acted in managing unforeseen events as a direct result of the
pandemic, but now we can see how much stronger the Group has become
as a direct result of these actions.
I would like to thank the whole team for their dedication and
look forward to this positive trend continuing over the coming
months.
My outlook on the business is still prudent, because of the
uncertainty caused by the second wave of Covid-19, but it is
fundamentally positive in light of the above-mentioned
achievements"
Third quarter 2020 trading update
The amount funded and the weighted average default rate are the
key metrics for monitoring the performance of the business. The
table below presents these two metrics for the last three quarters
of 2019 and the first three quarters of 2020, except for the
weighted average default rate that will become available after the
end of Q4 2020:
Quarter Ended Jun Sept Dec March June Sept-20
- 19 - 19 - 19 - 20 - 20
Amount Funded (GBP'000) GBP2,226 GBP2,196 GBP2,284 GBP2,549 GBP1,622 GBP2,307
--------- --------- --------- -------- -------- --------
Weighted Average Default 13. 6 12. 1
Rate 7.5% 5.6% 8.1% % % See note
--------- --------- --------- -------- -------- --------
Zaim saw a recovery in amounts funded back to almost
pre-pandemic levels with a 42.3% increase in the amount funded in
Q3 2020 compared to Q2 2020 mainly due to the expansion of its
online business platform (a dip of 9.5% vs Q1 and an increase of
4.8% on Q3 2019).
The weighted average default rate decreased from 13.6% in Q1
2020 to 12.1% in Q2 2020 due to the improvement of the credit
scoring system and, we hope, a trend towards normalization of
customer behavior following the pandemic. This represents an
encouraging performance given the unchartered territory as a result
of the Covid-19 pandemic and the increases seen in default rates in
Q4 2019 and Q1 for reasons outlined at the time.
Zaim has continued to improve its credit scoring system and
expects to continue to see the benefits of this over the coming
months.
Dynamics of the loan book
New loans volumes were positively affected by the rapid growth
of online business and the market recovery after the lockdown
measures were lifted in Russia in June 2020. Amounts funded
demonstrated impressive month-on-month and quarter-on quarter
growth with loans issued online increasing by 327% from GBP378k in
Q2 2020 to GBP1,153k in Q3 2020. In September 2020, GBP526k was
issued online which represents 59% of total amount issued that
month, with the online division becoming the largest business
segment for the first time in the Group's history.
Amounts funded in each of the months of the third quarter of
2020 are set out in the following table:
Period Amount Issued Growth rate Amount Issued Amount Issued Growth rate
Online % Offline Total %
GBP'000 GBP'000 GBP'000
July 274 58 .1 % 388 662 0 . 5%
-------------- ----------- -------------- -------------- -----------
August 353 28 . 7% 400 752 13 . 6%
-------------- ----------- -------------- -------------- -----------
September 526 49 . 0% 367 893 18 . 6%
-------------- ----------- -------------- -------------- -----------
Total Third
Quarter 1 , 153 1 , 154 2 , 307
-------------- ----------- -------------- -------------- -----------
Recent trading & Outlook
As can be expected, a significant driver of the overall growth
of the business is the online segment which continues to exceed
management's expectations.
In Q4 2020 we expect to a see a continuation of the business
growth driven mainly by the online segment combined with slight
improvements in the default rates as a result of continued
advancements to the credit scoring process. At the same time, the
business dynamics will depend on the pace of the resurgence of the
Covid-19 pandemic and the overall economic environment over the
course of the final part of 2020.
Enquiries:
Zaim Credit Systems Plc
Simon Retter
Siro Cicconi Tel: +44 (0) 73 9377 9849
Alex Boreyko Tel: +7 925 708 98 16
investors@zaimcreditsystemsplc.com
Beaumont Cornish Limited
Roland Cornish / James Biddle Tel: +44 (0) 20 7628 3396
Optiva Securities Limited
Jeremy King / Vishal Balasingham Tel: +44 (0) 20 3137 1902
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
[1] All figures presented throughout this announcement represent
unaudited management information taken from the internally
generated management accounts of Zaim-Express LLC
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END
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