Findi (ASX:FND) Reports Revenue Growth Amid Operational Hurdles

November 29, 2024 11:58 AM AEDT | By Team Kalkine Media

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Highlights

Findi reported increased revenue but faced setbacks in profitability.

Strategic investments and finance costs impacted the bottom line.

Recent acquisitions and contracts signal future potential growth.

Findi (ASX:FND), a transaction banking services provider, reported a revenue increase for the half year ending 30 September 2024. Revenue rose to $33.9 million, up from $31.8 million in the previous period. Despite this growth, the company posted a statutory net loss of $3.9 million, reversing from a $1.1 million profit in the corresponding period last year. Earnings per share fell to a loss of 7.28 cents compared to a previous profit of 3.01 cents.

Adjusting for strategic investments of $1.6 million and $3.16 million in finance costs tied to convertible debentures, Findi recorded a normalised profit of $860,000. The company attributed temporary setbacks to election-related restrictions in India, which impacted ATM transactions but have since stabilized.

Findi specializes in transaction banking services such as ATM deployment and management, digital payments, and financial services. Its Indian subsidiary, Transaction Solutions International, works closely with public and private sector banks, including the deployment of white-label ATMs.

Key Developments

Findi recently completed a $75.7 million acquisition of Tata Communications Payment Solutions Limited (TCPSL). This acquisition brings a significant addition of 4,600 ATMs and a white-label platform to Findi's operations. Additionally, the company is overseeing the rollout of 638 ATMs for the Central Bank of India.

However, delays in deploying white-label ATMs under a transferred license have raised execution challenges. Cash reserves decreased to $32.3 million from $46.1 million in March 2024, raising questions about cash flow sustainability. Gross debt currently stands at $62.2 million, highlighting financial challenges as the company invests in its growth.

Outlook and Guidance

Executive Chairman Nicholas Smedley emphasized the company’s commitment to achieving long-term sustainable growth. Despite the hurdles, Findi reaffirmed its FY25 revenue guidance of $80 million to $90 million and EBITDA guidance of $30 million to $35 million. Upcoming contracts, including one with the State Bank of India, and increased white-label ATM deployments are expected to drive stronger performance in the second half.

As of the latest market activity, shares in Findi (ASX:FND) are trading 15.48% lower at $6.55. While challenges remain, the company’s strategic initiatives signal an effort to position itself for future growth in the financial services sector.

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