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Credit Clear’s record first half, along with the ongoing onboarding of ARMA’s customers onto its digital platform provides the company with a long runway ahead.
Australian receivables management fintech Credit Clear Limited (ASX: CCR) continues to deliver strong financial results, delivering record revenue for the first half of FY22.
CCR posted a record revenue for H1 of $6.7m, which was up 37% compared to the previous corresponding period (pcp).
The recent acquisition of debt recovery solutions provider ARMA proves to be a major boon, providing CCR with an accelerated growth and a revenue run rate of $30m per annum.
In the first eight days of integrating ARMA onto the CCR platform, around $127k has already been received in digital payments from ARMA customers, with zero human interaction.
In addition, $722k worth of payment plans were committed to CCR’s digital solutions in those first eight days .
The tie up with ARMA has also broadened CCR’s customer base rapidly, with two top tier clients signing on as clients post-acquisition, and expected to add $1.6 to $2 million in revenue for CCR over the next year.
In total, CCR signed up 86 new clients iin the first half of FY22.
“The coming together of Credit Clear and ARMA has presented the combined company with a clear opportunity to accelerate growth, gain market share and become a market leader in Australia and New Zealand, while entering other international markets,” commented Credit Clear CEO, Andrew Smith.
“Our revenue has grown to a run rate of over $30m per annum, before our sales team has even started to cross and upsell our services,” he added.
Digitisation to keep growing
Credit Clear believes there is a fundamental transformation in the collections industry, which is accelerating the need for a hybrid collection service offering in both digital and traditional, with an increasing focus on digital solutions.
The company says there has been an exceptionally positive response from the clients to its modern hybrid collections offering, providing it with significant upsell and cross sell potential going forward.
In the first half, revenue coming from its digital segment rose by 80% on pcp to $2.4m, of which $1.5m was earned from the conversion of traditional to digital services.
This is expected to grow even higher when 280k of ARMA’s traditional customer accounts are fully integrated to CCR’s digital platform.
Meanwhile, a partnership deal with TehcHub announced in November last year will see CCR gain access to a multi- billion-dollar account receivables portfolio across South Africa, the UK and US.
Under the deal, Techub will deploy Credit Clear’s digital technology across selected portfolios of account receivables, which will generate commission revenues for CCR on all payments made across identified portfolios.
Tailwinds ahead
Credit Clear’s offering is positioned to capitalise on the significant increase in the amount of customer debt that companies are carrying on their books, particularly over the past two years.
Recent reduction in the amount of companies choosing not to sell customer debt to third parties have presented a significant opportunity for CCR to target a larger addressable market.
According to the company, the ongoing digitisation of the receivables industry amounts to an opportunity of over $2.5bn in Australia alone.
CCR says the competitive landscape has been slow to respond to the increased demand for a modern, digital solution, giving it a clear first- mover advantage in digital collections.
“We are at the very beginning of a broader macroeconomic trend that will see organisations holding much higher volumes of account receivables on balance sheet, and simultaneously electing to manage those accounts in arrears through the support of closely integrated providers,” said Smith.
“Credit Clear’s offering is perfectly matched to assist any organisation to manage their account receivables in a modern, in an efficient and customer centric way.”
“There is indeed a clear and significant pathway for CCR’s future growth,” he said.
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