Change Financial primed for more growth after integrating marquee acquisition
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Special Report: Banking-as-a-service (BaaS) company Change Financial (ASX:CCA) has established a platform for strong growth in 2021, following a busy operational period in Q4.
The company’s 4C filing for December showed it booked quarterly revenues of $US2.13m ($2.77m), while also managing a string of operational and technological updates.
In addition, CCA flagged strong growth in customer acquisitions, with new contract wins amounting to $US1.43m ($1.86m) in the quarter.
All that was achieved while Change’s management team consolidated its new combined entity, following the marquee strategic acquisition of Wirecard’s Aus/NZ assets in September last year.
The final consideration for the deal was $NZ6.83m, allowing CCA to take control of Wirecard’s core business assets in the Asia-Pacific region.
The acquisition paid immediate dividends, contributing $US0.58m($0.75m) with a robust core earnings margin of 30 per cent.
The December quarter also saw CCA’s management team recruit additional key staff, move into a larger new office and sell “multiple new licenses across four countries”, Change said.
Having assessed its new product suite in the wake of recent M&A activity, CCA’s executive team also embarked on a new strategic initiative – integrating its Mastercard certified processing platform and payments management platform into a combined central business unit.
CCA announced a rollout strategy that will be split into three phases, beginning with a proof-of-concept phase which is scheduled to for completion by the end of June.
“The deliverables from Phase 1 will give Change a platform to demonstrate its new capability to customers and accelerate the sales and business development cycle,” the company said.
It’s part of a broader strategy to successfully integrate a multi-channel product suite across CCA’s existing technology, along with debit and credit capabilities, EMV (Europay, Mastercard and Visa), virtual cards as well as Apple Pay and Google Pay.
To capitalise on that market opportunity, Change has also hired 10 new staff across four different countries, in senior roles spanning project management, engineering and business development.
“A key focus moving forward is to bring the technologies and platforms to market to take advantage of multiple commercialisation opportunities from its pipeline of new and existing customers,” Change said.
“These strategies include partnering with customers, banks and other FinTech and payment companies to accelerate new offerings in key markets such as Australia, Asia and the US.”
And having assumed some once-off operational costs during a busy quarter of growth, the company’s immediate focus is on maximising its near-term revenue opportunity.
In turn, the company “expects cash receipts to more closely align with earned revenue in coming quarters”.
Change Financial finished the quarter with $US4.19m cash at bank.
This article was developed in collaboration with Change Financial, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.