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IOUpay (ASX:IOU) clocks strong BNPL volumes in first half of March quarter

Image Source: IOU Presentation, dated 16 March 2021

Highlights

  • IOUpay has achieved increased volumes of myIOU BNPL transactions for the first half of the March quarter.
  • For FY22-to-date, myIOU income margin remains above expectations and within the Company’s target range at 6.9%.
  • Consumer and merchant sign ups, approval, and onboarding registered strong growth.
  • IOUpay has reported non-performing loans for the first time.
  • The Company is on track to launch myIOU 2.0 in March with new brand ambassadors.
  • IOUpay is positioned well for continued growth and addressing demand from its consumer and merchant base.

Fintech and digital commerce software solutions provider IOUpay Limited (ASX:IOU) has reported its success-driven year-to-date performance, typically characterised by the accelerated uptake of its BNPL service and flurry of developments.

The transaction volumes for the first half of the March quarter remained elevated with Total Transaction Value (TTV) of AU$9.4 million delivering Net Transaction Revenue (NTR) of AU$413,248.

ALSO READ: What are key focus points on IOUpay’s (ASX:IOU) agenda for 2022?

On a financial year-to-date basis ended 15 February 2022, the Company has reported TTV of AU$22.05 million delivering NTR of AU$1.51 million. As a result of the solid performance, myIOU income margin for FY22 to 15 February 2022 remains above expectations and within the Company’s target range at 6.9%.

GOOD WATCH: IOUpay (ASX:IOU) tapping the mushrooming digital payment opportunities in Southeast Asia

Source: IOU ASX Update, dated 1st March 2022

ALSO READ: IOUpay (ASX:IOU) clocks accelerated margin growth in December quarter 

IOUpay reports Non-Performing Loans for the first time

Given the portfolio was effectively established at the myIOU BNPL launch mid-June 2021, IOUpay for the first time has reported non-performing loans (NPL) of AU$2,487 as at 15 February 2022.

The NPL value indicates modest delinquencies and reflects the Company’s targeted consumer acquisition process.

Notably, IOUpay is focused on sophisticated credit scoring technology to authenticate customers and independently check credit profiles in addition to its continuous assessment and management of merchant relationship performance.

ALSO READ: Why BNPL player IOUpay can expect a bright 2022

Merchant & Consumer acquisition remains high

During the first half of the March quarter, 58 merchants operating 166 outlets around Malaysia were added to the myIOU platform. These new merchants cater to 13 industry vertical categories. Notable businesses amongst these new merchant relationships include Best Point Electrical Chain Store Sdn Bhd, Lazo Diamond, and Weng Kwong Jewellery, each having multiple outlets

The significant growth trend in consumer engagement, initially reported in November, has continued into Q3 FY22.

ALSO READ: IOUpay jumps 18% on ministerial consent to acquire Sibu Kurnia Marine

Source: Copyright © 2022 Kalkine Media®, Data Source: IOU ASX Update, dated 25 February 2022

RMS implementation advancing well

RMS has now confirmed the onboarding of over 140 merchants to the system, approved by the Company from the first batch of merchants offered for review. In the final step of the merchant acquisition process, IOUpay’s business development team would be required to complete an offline signup to confirm terms with each merchant.

RMS is engaged in the compilation of a second batch of merchants for assessment, based upon minimum transaction value expectations and industry vertical preferences. Meanwhile, monthly training of sales staff is underway to ensure optimal signup rates.

myIOU 2.0 launch on track for March 2022

IOUpay is on track to launch myIOU 2.0 in a major metropolitan shopping mall in March. The development would completely transform the consumer and merchant apps and website. The Company intends to announce two new brand ambassadors at the myIOU 2.0 launch, expected to bring their own significant influence and followers from Malaysia and across Southeast Asia.

Moreover, various media, advertising and promotional campaigns have been arranged to drive engagement with both merchant and consumer communities.

ALSO READ: IOUpay in sweet spot: Terrific 2021 paves way for brighter days ahead

IOUpay fine tunes with IDSB management

The Company’s wholly-owned subsidiary IOU Pay (Asia) Sdn Bhd has acquired 21% of the total issued share capital of I.Destinasi Sdn Bhd (IDSB) following the completion of the first tranche payment of ~AU$21 million.

In the meantime, the Company has been working closely with the IDSB management to establish reporting protocols, build operational interaction and develop inter-company staff working relationships. Planning is well underway for a pilot program marketing myIOU BNPL services into IDSB’s high-credit quality, civil servant customer base. 

The Company reported in its Interim Report announced 28 February 2022, that IDSB had achieved record revenues of more than AU$10 million and record profit before tax in excess of AU$6.5 million for its full FY21 ended 31 December. The impressive results were achieved in spite of the significant negative impacts from a national interest payment loan moratorium (which ended in January 2022) combined with market setbacks from the COVID-19 pandemic.

The Interim Report included, for the first time, financial reporting on its 21% investment in IDSB.  The reporting reflects the month of December only given the timing of the first tranche payment.

IOUpay showed a profit from continuing operations of AU$11,048.  However, the month of December includes higher expenses due to cyclical timing of tax payments and other operating expenses.

IDSB’s growth is set to continue with the expiration in January of the loan moratoriums and an ongoing uplift in economic activity.

The third quarter of FY22 has hit the ground running with the Company’s strong performance. As Malaysian economic recovery continues indicated by the myIOU BNPL performance metrics, IOUpay expects to cash in on the opportunities expected on the back of well-advancing Phase 4 of National Recovery Plan. 

IOU shares were trading at AU$0.185 in the early hours of 1 March 2022, up 2.777% from its last closing price.


 


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