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Software and payment solutions provider, Novatti Group Limited (ASX:NOV) has released its transactional revenue update today for the period ended 31 December 2018. The companyâs transactional revenue has increased by 21% from $881k to $1.06m (unaudited) over the December quarter across Novatti's range of payment processing services. From the December 2017 quarter to the December 2018 quarter, growth in transaction processing was approximately 196%.
The companyâs CEO Mr. Peter Cook said that the management believes that the companyâs continued strength in the transactional business is a fundamental capability that supports the companyâs strategy to apply for the restricted banking license.Â
The Company expects continued strong growth in its transaction processing revenues to continue in FY19. From a strategic point of view, the continued growth is further welcomed because many of the customers currently using Novatti's transaction processing services will be primary customers for future banking services.
For the financial year ended 30 June 2018, the Company had clocked a revenue of $ 6.36M, up by 80% from the prior year. The EBIT came in at a loss of $2.0M which includes non-cash expenses of approximately $0.5M (including option expense), an improvement of 56% as a result of sustained growth and focus on cost management. The company has progressed extremely well on its aim of expanding its transactional businesses with revenue from its recurring and transactional businesses growing from $0.2M to $1.8M.
The company reported a loss after providing for income tax of $2,069,034. The Groupâs Net Asset Position as at 30 June 2018 was $8,749,151 with $4,509,142 held in Cash or Cash equivalents. The Group was debt free as on that date.
Novatti Group Limited acquired 100% of Vasco Pay, a reloadable Visa card provider that targets multiple market segments including millennials, parents, students, and disbursements. The acquisition got completed on 8 June 2018.
The consideration for the acquisition was $150,000 plus 1.6 million Novatti Group Ltd shares. Besides, the vendors have the right to participate in earn-outs which are based on EBITDA multiples of 1.225 on the 30 June 2020 EBITDA and 1.1025 of 30 June 2021 EBITDA. The earnouts may be taken in cash or shares at an issue price of 90% of an agreed to 90-day Value Weighted Average Price. The 1.6 million shares are escrowed, 50% released in 12 months and the balance released in 24 months from completion.
Now let us quickly look at the companyâs stock performance over the last few months. Currently, it is trading at a price of $0.185, increased by 8.824% during the dayâs trade, with a market capitalization of circa $26.78 Mn as on 22 Jan. 2019. The stock opened at $0.17, which was also the dayâs high & a touched a dayâs low of $0.165. The company has produced a YTD return of -5.56% and also posted returns of -37.04%, -19.05 % and -10.53 % over the last six months, three months and one-month period respectively as on 17 January 2019. It has a 52-week high price of $0.400 and a 52-week low of $0.165, with an average volume of ~39,834.
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