The QuickFee Ltd (ASX: QFE) share price is taking a ride downwards today following the release of first-half results. Despite the growth in buy now, pay later (BNPL) revenues, shareholders appear to be making a quick dash for the door.
After plummeting to a low of 42 cents this morning, the QuickFee share price has clawed back some ground and is currently trading at 46 cents, down 8%.
Why's the QuickFee share price dropping?
Australia growth not so good
QuickFee is a little different to the likes of Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and other consumer-facing BNPL companies. In contrast, QuickFee provides instalment systems and lending to services firms – or in other words, business to business. This is similar to another ASX-listed BNPL player, Cirralto Ltd (ASX: CRO).
The good news is QuickFee delivered solid growth in the United States, with transaction volumes processed growing by 182% to US$285 million. Lending in the region also increased by 41% to US$7.9 million. There are now 469 firms registered with QuickFee US, a 14% increase.
When we look at the results for Australia, however, the good news begins to get muddied. Lending in Australia suffered due to businesses having access to government stimulus. However, as the JobKeeper scheme evaporates, companies are resorting to loans for liquidity once more.
Despite lower lending in dollar terms, QuickFee continued to grow its customer base during the half. Notably, it added several major law and professional service associations during the period.
Splitit partnership shows traction
QuickFee partnered with Splitit Ltd (ASX: SPT) back in September last year – which failed to rally the QuickFee share price. The partnership enables QuickFee to offer Splitit's credit card instalment system to its customers. Since launching in December, QuickFee has signed 170 additional merchants, taking the total to 149 in the US and 128 in Australia.
In the US alone, the instalment offering is expected to expand QuickFee's addressable market by an additional 650,000 accounting and legal firms.
Optimism remains high for QuickFee, reporting total-transaction-volumes between 1 January to 14 February that are 2.4 times greater than the prior year.
QuickFee expects a strong tailwind from the accelerations towards online payments due to COVID-19. The company is also priming its balance sheet for growth following the completion of A$17.5 million share placement.
