Why the Credit Clear (ASX:CCR) share price is up 12% today

After hitting 9-month lows, Credit Clear is racking up some time in the green this week.

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There are signs of life coming back to the Credit Clear Ltd (ASX: CCR) share price, which has bounced more than 25% in the last three trading sessions.

At the time of writing, the Credit Clear share price is up 12% to 61 cents after the company released an investor presentation this morning.

What did Credit Clear announce?

Credit Clear specialises in receivables management solutions. Today’s presentation highlighted that the company’s top-line revenue was “resilient” with “momentum building as COVID-19 related debt collection restrictions ease”. With that in mind, the company advised it has shifted its focus to converting clients to its digital platform to achieve an expansion in gross margins.

Within today’s update, the company reported a 2,410% increase in the conversion of traditional clients to the digital platform. This 4-digit increase is based on the revenue of converted clients from the third quarter of FY20 to the third quarter of FY21.

The third quarter FY21 saw digital services revenue account for 37% of the company’s revenue, with digital gross profit margins of 96%.

The update also highlighted the company’s strong pipeline of opportunities across its target verticals including insurance, water and utilities, automotive, banks and education.

Additionally, the presentation pointed out that a big milestone was made by the company back in April after it signed its first major insurance client, Suncorp Group Ltd (ASX: SUN).

The pipeline of opportunities hinted a number of potential contracts including “late-stage discussions with tier 1 insurance clients”, “progress with other major water and utilities companies”, “advanced discussions with two major automotive brands’ finance arms” and a a big four bank committing to a pilot program.

How the Credit Clear share price has performed since its IPO

Credit Clear listed on the ASX on 27 October at an initial public offering price of 35 cents. Its shares closed at 46 cents on its first day of listing.

Just three days later, on 30 October, its shares briefly hit $1.20, or a 245% return for those that managed to participate in the IPO.

From there, the Credit Clear share price slowly drifted lower, hitting a 9-month low of 46.5 cents on 4 June, or going full circle back to debut prices.

On a more encouraging note, its shares have lifted more than 25% in the last three days to 61 cents at the time of writing.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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