- ASX-listed digital commerce software and services provider, iSentric Limited (ASX:ICU) has delivered a return of more than 766% in six months and over 239% in three months, as on 22 September 2020.
- The Company plays a pivotal role, assisting its institutional clients to securely authenticate end-user customers and process banking, purchase and payment transactions.
- Few factors boosting the Company’s position are innovative technology platform, robust focus on business divisions, and strong cash position and cash flows, backed by capital raises and reduced expenses.
- The Company plans to drive more revenues through technical improvements and growth opportunities in its existing fintech businesses of mobile banking and digital payments.
The COVID-19 induced environment has created a need for fast digital payment processes and mobile-based applications to run day-to-day life operations. Not only the digital platforms facilitate prompt contactless payment in the time of physical distancing, they are also shaping up the future prospects of payment services, as consumers are getting used to the hassle-fee smart payment system.
The success of digital payment platforms is reflected in the share market performance as well, with share prices of several players in the related space witnessing significant price rally amid the pandemic.
iSentric hits a triple-digit return in six and three months
ASX-listed fintech company iSentric Limited (ASX:ICU), which provides digital commerce software and services, has given a return of more than 766% in six months and over 239% in three months, as on 22 September 2020. The Company closed its trading session at A$0.097 on 23 September, up 24.359% from the previous close.
iSentric played a pivotal role during the pandemic, assisting its institutional clients to securely authenticate end-user customers and process banking, purchase and payment transactions. The Company serves 20 leading Malaysian banks and large telcos and corporates based out of Malaysia and Indonesia. iSentric also serves telecommunication network providers to help them offer mobile OTT (over-the-top) services.
On that note, let us scan through the recent business updates that have bolstered the Company’s position in the industry.
Innovative Technology Platform
iSentric’s proprietary technology platform, the IOU Pay Platform, processes more than 17 million online payments and consumer interactions every month. The platform drives recurring monthly revenue for huge volumes of mobile banking transactions and digital payments, corporate messaging and product marketing initiatives.
The Company recently announced key improvements to drive more revenues from the platform. The changes are expected to enhance the existing bank and corporate customers’ services offered to their consumer and SME customers.
Important improvements included:
- The system’s ability to integrate with iSentric’s existing clientele including banks, payment gateways and industry sectors to credit score, authenticate and onboard customers.
- Ability for the processing of clients’ loan payments via debiting of bank accounts, debit cards and credit cards.
The Company has also added consumer loan and instalment-based Buy Now Pay Later (BNPL) payment processing to achieve higher volumes of purchase transactions between customers and merchants.
Strong Cash Position and Cash Flow
In its preliminary final report for FY2020 released on 31 August, the Company highlighted a steady cashflow from Mobile Banking and Digital Payments activities that were boosted by capital raises. The Company recently in the month of September secured more than A$2 million funding through a non-underwritten Share Purchase Plan with responses received from 194 shareholders, which was oversubscribed and was scaled back on a pro-rata basis to 30% of the issued capital of ICU.
The Company reported cash and cash equivalents of A$578,063, as on 30 June 2020. The capital raise of more than A$2 million in September and A$409,477 in July 2020, strengthened its cash position significantly.
Reduction in Expenses Leading to Reduction of Net Loss
Though the Company recorded a marginal decrease of 2% in revenue in FY20 from FY19 to A$6,445,109, because of COVID19 restrictions in Malaysia and Indonesia that impacted revenue streams, it managed to lessen operating expenses by more than 50%.
iSentric recorded a 52% year-on-year decline in expenses to A$4,149,226. The decline was due to reductions in following material expenses:
- Significant reduction of 43% (y-o-y) in amortisation and depreciation to A$618,609
- Substantial decrease of 69% (y-o-y) in impairment that stood at A$598,756
- 74% (y-o-y) reduction in other expenses to A$511,511.
Its share price received significant boost post announcement of its preliminary report on 31 August with share price closing 21.67% higher than its previous close price.
Strategic Focus on Core Fintech Business Divisions
iSentric has renewed its focus on growth opportunities in the existing fintech businesses of Mobile Banking and Digital Payments in Malaysia and Indonesia and has announced key changes in the board to drive the planned growth.
The Company has rebranded its mobile banking and payment processing platform to the IOU Pay Platform and renamed Isentric Wireless Sdn Bhd to IOU Pay (Asia) Sdn Bhd.
During the Extraordinary General Meeting of Shareholders scheduled for 30 September, the Company also plans to propose company name change, further capital raisings for working capital and product development, and other important matters. The plan is to change the Company name to IOUpay Limited from Isentric Limited and ASX stock code to ASX:IOU from ASX: ICU.