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

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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.

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