Novatti surges into FY22 with cash and momentum after transformational growth in FY21
Link copied to
Following major growth in FY21, the company also has plenty for investors to look forward to in FY22 with an exciting development pipeline.
In the competitive ASX payments space, listed player Novatti (ASX:NOV) has separated itself from the pack with a transformational year in FY21 which saw its share price more than double.
Those results were proven out with the release of the company’s annual report this morning, which was highlighted by a 49.8% lift in group revenues to $16.48m.
And the numbers reflected the ability of Novatti’s management team to execute on a multi-channel payments ‘ecosystem’ strategy comprising key licences, partnerships, technology, and their team.
At the heart of the company’s vision is to provide a multi-purpose solution that “provides businesses with everything they need to pay and be paid”.
Rewinding 12 months, Novatti kicked off the 2021 financial year with a $10.2m capital raising at 25c a share – funds that it would use to invest in product development and pursue strategic partnerships.
During the year, the company secured distribution of its Visa prepaid cards on major platforms including Google Pay, Apple Pay and Samsung Pay. It was also selected by BNPL leader Afterpay to deliver on the rollout of APT’s Visa payment card program in New Zealand.
As evidence of Novatti’s ability to deliver strong returns for shareholders, investors in that June 2020 raise have so far booked a 100% return on their investment.
And in July this year, the company followed up with a marquee $40m plus capital raise to fund its global rollout strategy and a strategic stake in accounting software provider, Reckon Ltd (ASX:RKN).
With a strong balance sheet and plenty of operational momentum, Novatti is now well placed to continue its strong track record of delivering growth for shareholders in FY22 and the years ahead.
That momentum was clearly illustrated in Novatti’s full-year numbers, where the 50% lift in annual revenues was boosted by a record revenue result in the June quarter ($4.9m).
Heading into FY22, the company has now booked nine straight quarters of record revenue growth for its core payment processing business.
And as it scales up, Novatti’s executive team has taken the opportunity to invest heavily in both product development and human resources. Reflecting its ongoing growth, staff headcount at the company almost doubled in FY21 from 65 to 128.
Those extra investments flowed through to an underlying EBITDA loss of $4.8m, but Novatti finished the year well capitalised with $8.8m in the bank. And as it executes on the high-growth phase of its business cycle, the company’s management team is focused on driving further momentum in top line revenues.
Looking ahead, the company is planning to leverage its $40m capital raise to increase its presence in existing markets and explore a range of acquisition opportunities.
Along with its existing Australian Financial Services Licence (AFSL), the company is also pursuing more licensing IP with plans to obtain Visa and Mastercard Acquiring Licenses before the end of September year.
The company is also working with domestic regulators to obtain a restricted banking licence in the Australian market before the end of November, leaving investors with plenty to look forward to in the second half of 2021.
With its footprint now well-established in the Australia/New Zealand region as well as the US market, through its fully-owned subsidiary Emersion, Novatti is poised for a step-change in future growth with the consolidation of its position as one of the leading ASX payments companies.
This article was developed in collaboration with Novatti, 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.