Humm (ASX:HUM) share price fires on FY21 results

Let's take a closer look.

| More on:
a fashionable young woman poses with a shopping bag.

image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Humm Group Ltd (ASX: HUM) share price has is up during afternoon trade after releasing its results for FY21.

Shares in the buy-now-pay-later (BNPL) initially dipped lower in early trade.

However, as investors digested the company's financial results for the full year, shares in Humm have rallied to be more than 3% higher for the day.

Let's take a look at how Humm performed for the full year.

Humm share price jumps on record BNPL transactions

  • FY21 Cash Net Profit After Tax (NPAT)  of $68.4 million, up 121.1% on prior corresponding period (pcp)
  •  FY21 Statutory NPAT of $60.1 million, up 160.2% on pcp
  • Transaction volume of $2.69 billion, up 8.2% on pcp
  • Active customer numbers grew 19.7% on pcp to 2.7 milliion in Australia, New Zealand, Ireland and the United Kingdom
  •  BNPL volume of $1.03 billion, up 31.3% on pcp
  •  App downloads of 1.2 million, up 75.8% on pcp
  •  Commercial and Leasing volume of $540.3m, up 55.6% on pcp
  • Strong balance sheet with cash balance of $108 million

Despite its net cash position, the company opted to not pay a dividend in FY21 for a third straight reporting period.

What happened in FY21 for Humm?

Humm noted that revenue for the full-year dropped 7.3% to $443.9 million. The company cited a 27% increase in marketing expenses and also attributed the loss to its struggling cards business.

Humm's credit card volumes dropped 30% to $417 million as a result of reduced travel during the pandemic.

Despite its struggling cards business, Humm reported an 8.2% increase in transaction volume of $2.69 billion. The company attributed the increase to growth in its BNPL services.

Humm's BNPL transactions surpassed $1 billion over the year for the first time. Overall, the company saw its BNPL division deliver a profit of $1.2 million.

Humm attributed the strong growth in its BNPL segment to the introduction of new products, bundll and hummpro as well as an increased digital presence.

What did management say?

Humm's Chief Executive Officer highlighted the company's improved brand awareness, stating:

The benefits of the rebrand are clear. Nearly one in five customers now uses humm for both big and little purchases. A quarter of our bundll customers also have humm to complement their everyday spend. We have created a new digital shopfront of products that caters to a wide shopping spectrum and our Australian customers are now using our products 19 times on average per year.

What's next for Humm?

Humm highlighted that the company has numerous growth initiatives underway including international expansion, new product growth and new partnerships.

The company noted that it plans to commence operations in Canada in the first half of FY22. In addition, Humm noted intentions of expanding into India.

The BNPL player will host an investors day on the 27th of October 2021 where it will provide a full strategic update alongside volume and other measures for FY22.

Despite meeting guidance, the Humm share price has sunk more than 2% in early trade. It has since crawled back into the green and is trading at the time of writing is trading at 97 cents.

Motley Fool contributor Nikhil Gangaram 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 recommended Humm Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Broker looking at the share price.
Share Market News

5 things to watch on the ASX 200 on Tuesday

Here's what to expect on the local market today.

Read more »

A young woman sits with her hand to her chin staring off to the side thinking about her investments.
Broker Notes

Down 16% in 6 weeks: Is this ASX 200 share a bargain buy?

Bell Potter has given its verdict on this beaten down stock.

Read more »

Ten smiling business people wave to the camera after receiving some winning company news.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX 200 enjoyed a strong start to the trading week today.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these shares.

Read more »

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop

1 ASX 200 dividend stock down 20% to buy right now

This beaten-up ASX share could be a top pick for dividends and stability.

Read more »

Man sitting in a plane looking through a window and working on a laptop.

2 cheap ASX 200 shares I'd buy in May

I think these stocks are too cheap to ignore.

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Share Gainers

Why Gentrack, New Hope, Nuix, and Star Entertainment shares are charging higher

These shares are starting the week strongly. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why Core Lithium, Duratec, Galan Lithium, and Michael Hill shares are sinking today

These shares are starting the week in the red. But why?

Read more »