The Humm Group Ltd (ASX: HUM) share price is on course to start the week with a solid gain.
At the time of writing, the financial services company's shares are up 6% to $1.04.
Why is the Humm share price charging higher?
The driver of the Humm share price gains today has been the release of the company's update on its performance in FY 2021.
According to the release, Humm had a strong finish to the financial year thanks to a record quarterly performance by its buy now pay later (BNPL) segment.
For the three months ended 30 June, Humm reported a 57.3% increase in transaction volume over the prior corresponding period to $774.9 million. The company's BNPL contributed segment transaction volume of $304.9 million for the quarter, up 68.7% on the same period last year.
Supporting its growth was a 44.3% increase in Cards transaction volume to $287.5 million and a 62.2% jump in Commercial and Leasing transaction volume to $182.4 million.
This was driven by a 19.7% increase in customer numbers to 2.7 million and the addition of 1,362 new merchants across Australia and New Zealand during the quarter. Management noted strong growth in key verticals of health, luxury retail, home improvement, and automotive.
FY 2021 profit guidance
Based on Humm's unaudited accounts, it expects to report a FY 2021 cash net profit after tax of $68.4 million in FY 2021. This will be an increase of 121.1% on the prior corresponding period and is consistent with the outlook it previously provided to the market.
Humm's Chief Executive Officer, Rebecca James, commented: "Hummgroup's continuing momentum is reflected in all segments performing strongly in 4Q21 to achieve record volumes across all products of $775m. Quarterly volume growth of 57% is a clear indicator of the benefits of hummgroup's diversified portfolio."
Positively, the chief executive is optimistic this strong form will continue in FY 2022. She said: "We are confident in carrying this volume momentum into FY22 as our products continue to evolve and mature, we execute on our international expansion, and we deliver on our partnership strategy."
Rebecca James also highlights that the company is profitable, unlike other BNPL providers such as Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P).
She concluded: "hummgroup has continued to deliver growth and profit in FY21, and we expect to report Cash NPAT of $68m, an increase of 121% on FY20. hummgroup's sustainable profit is a key differentiator against many of our competitors, and importantly will be the fuel to fund the Company's growth strategy."
