Credit Intelligence has released preliminary final results for FY22 with its Aussie subsidiary Chapter Two Holdings really driving Group revenue after a blockbuster year.

With a turnaround revenue increase of some 320%, Chapter Two is CI1’s Sydney-based debt solutions firm, focusing on providing fintech debt negotiation and mortgage broking services to Aussies in financial hardship and a surprise spearhead for the Aussie-listed fintech conglomerate.

In an update to the market, Credit Intelligence (ASX:CI1) reported a group revenue increase of well over 20% to $15.7m while normalised profit of $2.2m (excluding the non-recurring impairment loss of $3.1m recognised during FY22) shows the company continues to deliver consistent performances across a range of metrics.

The contributions from the Australian business to the Group results were extremely welcome.

The Aussie business’ delivery of some $2m in revenue shows the company is both well placed and well managed to service a key niche in the growing fintech market amid a harsh rising rate cycle which is almost certain to hurt already leveraged Aussie borrowers.

Rates rise along with stress

As mortgages go up, it could lead to stress on other unsecured facilities people may have such as credit cards, personal loans, and BNPL.

Chris Mushan, managing director of Chapter Two told Stockhead earlier this year, the imminent rise in rates could cause a trickle down effect which brings Chapter Two’s solutions into play.

“Given Australia’s love for property and the importance of owning property, the mortgage always comes first for Aussies,” Mushan told Stockhead. ”So when there is a push in the household budget, those credit cards, personal loans and BNPL repayments get knocked off from the list.

“They stop paying them and that’s where Chapter Two starts seeing a lot of our inquiries come through,” he said.

The other driver of revenue for Chapter Two has been its Debt Management app, released after Christmas and finding favour with customers for its ability to list all of its clients’ debts in one place, removing the need for multiple internet banking accounts and direct debits.

Core businesses

The Group’s core business (provision of bankruptcy administration services, Individual Voluntary Arrangement proposal consultancy and implementation services) has also reported an increase in revenue by 9% to $7.2m compared to FY21.

Executive Chairman Jimmie Wong says contributions from the Singaporean business were positive during the challenging economic climate.

That side of the business delivered an increase in revenue to the Group of 12% to $6.2m.

“Lending and debt management are the current profitable businesses of CI1.  We will look for more funding to expand such businesses in both the existing and appropriate new markets,” Mr Wong said.

During the year, OneStep and HKBNPL launched an app that offers BNPL services to SMEs and individuals.

“CI1 intends to develop and expand our BNPL business in a prudent manner in HK and other countries. Target to be a sustainable unique and profit model.”

This article was developed in collaboration with Credit Intelligence, 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.