Cirralto’s Quarterly Results Illustrating Remarkable Development During June Quarter

Summary

• Business Payments products and solutions provider, Cirralto along with its merger partner Appstablishment rolled out its Spenda digital payment products catered to solve the payment receipt hassles of merchants.
• Spenda primarily targets business-to-business (B2B) transactions, which have significant value over business-to-consumer (B2C) transactions. Cirralto charges an average merchant fee of 1.45% of the total value of each transaction processed.
• Cirralto's merger with Appstablishment will provide the Company a technology uplift, a ready-made development team, along with offering Research and Development grants, sales growth, and reduction in duplication of overhead costs to the business.

Australian listed Cirralto Limited (ASX:CRO) seems to be on the money delivering the right services at the right time, with the June Quarterly Results vouching for its strategically apt endeavours. The technology suite catering to the payment needs in the unprecedented COVID-19 scenario has proven to be a silver bullet, facilitating smooth transactions for businesses grappling with the pandemic impacts.

During the Quarter, Cirralto, in association with its merger partner, Appstablishment unveiled the Spenda Payment Platform, which offers a wide array of services, enabling the businesses to become eCommerce ready and to thrive amidst the disruptive trends.

A Glimpse at Key Statistics

Despite the Quarter commencing with a bleak outlook, owing to a pervasive downturn across the economy during March and April, a remarkable revenue recovery soon followed in May. The general revival in the Company's customer's sales revenues resulted in a sharp increase of 398% in Average Revenue Per User for Cirralto.

Monthly sales transactions of the network rose over $200 million by value in June, demonstrating a sharp rise from April, when sales fell below $150 million.

Notably, the Spenda payment services enable the Company to pay fees on a sliding scale with the base blended merchant fee of 1.5% of the invoice value.

Strategic Endeavours Fostering Growth

Product Development

During the Quarter, Cirralto expanded its footprint in the payments industry to augment its product capability, improve its margins, and enable integration with OpenBanking platforms and Australia's New Payments Platform (NPP).

Furthermore, the Cirralto's efforts were directed at the certification and commercial release of the SpendaCollect. The Company believes that the accomplished work during the Quarter will drive substantial growth in the revenue.

During the Quarter, additional works were carried out to improve the data security and platform scaling capacity of the Company. Meanwhile, the Company engaged independent specialists to undertake security testing for confirming no significant vulnerabilities or threats.

Marketing and Business Development

Towards the end of the Quarter the business began implementing its channel, inside sales and marketing strategies. Planned marketing activities were postponed during the Quarter owing to economic downturns and continued travel restrictions.

Kalkine Image (Data Source: CRO ASX Update)

Cirralto is actively utilising its competitive advantages, with payment flexibility, integration, and the delivery of digital business outcomes.

ALSO READ: Cirralto Update: SpendaCollect market fit

Corporate and Financial Undertakings

The Company received a $600,000 funding facility as an advance against unsecured convertible notes by entering into a Convertible Security Funding Agreement with key major shareholders. The funds received would be employed towards the continued development of its projects and general working capital purposes.

For completing the pending acquisition of Appstablishment by Cirralto, both these companies are working together towards the completion of essential compliance items necessary to finalise the same. The merger will deliver approximately $1 million in Research and Development grants in FY2020, along with approximate $0.5 million in annual sales, while supplementing reduction in duplicate overhead costs to the business.

As per the Managing Director of Cirralto, Adrian Floate, following this merger the Company would receive a

Cash Position

Cash receipts for the Quarter ending 30 June 2020 totaled $118,000. During the period, while there was a 73% growth in cash collection, NET operating outflows reduced by $518,000. As the business during the period continued to roll out Spenda products and make the transition to a Business Payments Service Provider, total cash at the end of the Quarter was $272,000. Notably, available funds at the end of the Quarter via undrawn facilities total $769,926.

Way forward for the Company

Kalkine Image (Data Source: CRO ASX Update)

As of 6 August 2020, CRO stock ended the day's session at $0.013, up by 8.33%. CRO share value has increased by 100% in the past six months.

(Note: All $ is in AUD unless stated otherwise)