Diversified financial services group Humm Group [ASX:HUM] provided an insight into its financial health and operational progress in an update today that incorporated its unaudited financial results for the quarter ending 31 March 2023.
The fintech said it had churned $965.2 million in volume over Q3, an increase of 11% on the prior corresponding period (pcp).
HUM said its commercial segment volume was also up on pcp by 39% at a volume total of $382.2 million.
The company’s share price was inching up by 2.25% by early afternoon Wednesday, trading around 45 cents a share.
It may take more updates like these to get the stock on a better long-term standing, however, as HUM is currently more than 19% down year-to-date and down in the ASX 200 [ASX:XJO] by 42%:
Source: Market Index
Humm Group’s Q3 FY23 business run-down
Results aren’t so positive for the consumer finance division, which saw volume of $583 million, slightly down by 2%.
This was made up of a mixed results including:
- Point-of-sale plans (PosPP) in Australia ‘Big Things’ volume up 31% to $150.2 million
- PosPP Australia’s ‘Little Things’ volume down by 19% to $62.5 million as a result of Little Things becoming a pure companion product to big ticket purchases
- Other PosPP volumes were also down by 38% as a result of planned product closures now in their run-off period, taking volumes to $65.7 million
- Cards (Australia and New Zealand) volumes went up by 2% on pcp combined, but were up by 8% in New Zealand with volume of $177.9 million, and down by 6% with $126.8 million in Australia
Card volume had risen in New Zealand due to high customer spends. But it was a different story in Australia, where a 6% decrease was believed to have been measured against a post-pandemic rebound in customer spending experienced in the prior period.
PosPP receivables tallied $811.9 million in the quarter, which were up by 4% on pcp (receivables were reported at $781.3 million last year).
Humm posted an improvement to net loss in Q3 of 2.1%, which was 70 basis points down on the pcp.
Net loss volume for ‘Small Ticket’ PosPP was 3.6% down by 15 base points on pcp, which the group says is a strong result after losses related to the closure and restructure of its suspended products.
Humm Group’s CEO, Rebecca James, said:
‘Today’s results are a further demonstration of the disciplined approach we are taking to growing our core business in bigger ticket financing in both Commercial and Consumer Finance, in a profitable and competitive manner.
‘Our Commercial business produced another record quarter with volumes growing 39% on pcp while also delivering strong credit outcomes. Receivables for Commercial were up 69% on pcp, with net loss/ ANR remaining at 0.6%. Repricing initiatives implemented in the first half are beginning to deliver results.
‘The combination of higher gross income and the benefits of cost saving initiatives are expected to mitigate the seasonal impact of credit losses and margin compression, resulting in a second half normalised cash profit higher than the first half.’
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Regards,
Mahlia Stewart,
For Money Morning
