ASX-listed fintech Butn enjoys positive growth
ASX-listed fintech Butn have announced positive results for the six months ended 31 December 2021 (1H22), with increasing revenue 12% to $2.5 million and momentum in the business, with two record origination quarters.
The software provider increased the originations through its suite of complementary business finance solutions based on individual transactions mainly because BTN can seamlessly integrate into third party platforms through customisable APIs.
Butn’s Co-founder and Co-CEO, Rael Ross said, “We have had a strong 1H22, leveraging the foundations and growth platform we established in FY21, with increasing momentum in originations and delivering on the core areas of our business strategy. Butn has just begun our growth journey and we’re excited by the opportunities we see.
“As a leading provider of business funding solutions, our purpose is to help SMEs. We are focused on making Butn the natural funding home for businesses and their transactions, where funding is easy, simple and readily available.
“We provide deep platform integration, directly into invoicing and payments workflows, so end users can access our services without needing to go outside their current ecosystems. Delivery for clients provides us with a high growth business based on our differentiated funding approach, leading technology and mass origination and distribution strategic partnership model. We look forward to continued growth and exciting opportunities in the future.”
Growing momentum
The Group reported 1H22 origination growth of 30% to $127.6 million (1H21: $98.0 million). This included consecutive record quarters in Q1FY22 and Q2FY22, with December a monthly origination record of $25 million, up 44% on pcp.
Butn is maintaining its industry low cumulative historical losses of under 0.1% of total cumulative originations.
Financial performance
1H22 revenue was up 12% to $2.5 million (1H21: $2.3 million). COVID-19 continues to impact segment mix, with some higher margin segments, such as automotive and insurance, impacted more than lower margin segments such as FMCG. The revenue margin is showing early signs of improvement as COVID-19 impacts lessen, and with a higher margin contribution through Butn’s fintech solution.
Cash on hand increased to $23.8 million (FY21: $15.5 million), up 53% on pcp. Receivables increased to $37.5 million (FY21: $29.7 million), up 26% on pcp with origination growth driving the fast-turning receivables book which turns on average six times per annum.
In July, Butn listed on the ASX following a successful IPO that raised $20 million (before costs).
As foreshadowed at the time of IPO, Butn commenced positively restructuring its debt with the core aims of reducing funding costs, increasing headroom and extending funding flexibility.
Positive growth outlook
Commenting on the Butn’s outlook, Ross added, “FY21 was a foundation year for Butn, assembling the key building blocks across product, people and strategic partnerships. The first half of FY22 leveraged that foundation, with growing momentum. We see continued origination and revenue growth, particularly as existing and yet to be announced platform partners progressively roll out Butn’s funding products to their users.
“We are encouraged by the economic reopening as COVID-19 restrictions ease and the opportunities it brings, whilst maintaining our robust credit and risk processes to preserve our industry low non-recoverable write offs. Finally, we will continue to positively restructure Butn’s debt, with the consistent aims of reducing funding costs, increasing headroom and extending funding flexibility.”
