The Smartpay Holdings Ltd (ASX: SMP) share price has jumped over 7% after the ASX payments share released a strong FY23 report.
This business offers merchants an EFTPOS payment solution. They’re used by businesses like bars, cafes, butchers and so on.
FY23 result
Here are some of the highlights for the 12 months to 31 March 2023:
- Revenue jumped 62% to $77.8 million
- Total transaction value (TTV) went up 83%
- EBITDA (EBITDA explained) increased 81% to $18.4 million
- Net profit after tax (NPAT) surged 286% to $8.5 million
- Net cash on the balance sheet improved to $2 million
Smartpay pointed to Australian revenue showing “strong growth” throughout the reporting period – Australian acquiring transactional revenue grew by 94% to $60.5 million. This is very promising for further growth of the Smartpay share price.
The ASX share said that the growth of Australian revenue reflected the continued investment in marketing and sales activities in Australia. Australia now represents 81% of total revenue, up from 69% in FY22.
The bump-up of marketing activities by $2.9 million to $6.9 million resulted in customer numbers continuing to increase across the year. The number of transacting terminal base is now more than 15,700 terminals at March 2023, up 62% year on year.
A key part of this result was the profit measures increasing quicker than revenue – Smartpay said this reflected its “ability to leverage” its operating base to support rapid growth.
Outlook for the Smartpay share price
The ASX payments share said that its continued investment in technology throughout the year remained focused on the ongoing development of the next generation customer interface system and the digitisation of the terminal management and acquiring platform.
Smartpay also said that FY23 saw continued and accelerated growth in Australia, while it’s committed to the next phase of business in New Zealand.
The company said that it’s delivering on growth, profitability, operating cashflows, free cashflows, and it’s still committed to those fundamentals.
I think the business is doing very well, though it will be interesting to see if it can continue growing in 2024, as stronger competition could be coming from the likes of Tyro Payments Ltd (ASX: TYR) and Apple.
It could do well over the rest of 2023 as it benefits from the COVID transaction rebound, but I’m less certain about the long-term.
