Humm (ASX:HUM) share price edges higher on first quarter results

The Humm share price doesn’t seem overly excited about its solid 1Q22 performance.

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The Humm Group Ltd (ASX: HUM) share price opened slightly higher on Friday after the company delivered its first quarter results.

At the time of writing, the Humm share price is up 1.1% to 91.5 cents.

Humm growth momentum continues in FY22

Humm has recapped its September quarter, announcing another strong period of sustained growth. Some key highlights include:

  • Group 1Q22 total transaction volume (TTV) rose 39.6% against the prior corresponding period (pcp) to $763.3 million
  • BNPL TTV up 44.5% to $308.8 million
  • Cards (Australia and New Zealand) volume up 7.6% to $249.4 million
  • Commercial and leasing volume up 102.2% to $205.1 million
  • Total hummgroup customers rose 6.1% to 2.7 million including a 16% increase in BNPL customers
  • Net loss of $24.0 million, up 9.3%

Hummgroup’s total transaction volume increased 39.6%, reflecting a well-rounded performance from its diversified portfolio of financial products.

The company’s total customers sat at 2.7 million by the end of the September quarter, with a strong increase in BNPL customers offset by a decrease in customers associated with a number of “grandfathered consumer products”.

Humm’s BNPL segment, consisting of humm, bundll and hummpro delivered a 44.5% increase in TTV, driven by strong volume growth in its humm ‘Little things’ campaign in Australia.

The company noted that the higher income generating ‘Big Things’ volume growth of 2.5% was impacted by store closures across New South Wales, Victoria and Auckland. However, its ‘Little things’ volume surged 156.8% on pcp, predominately driven by e-commerce transactions during lockdown.

The BNPL segment flagged a net loss / average net receivables (ANR) of 5.9% in the first quarter, increasing by 120 basis points on pcp. The jump reflects the temporary increase in shorter duration BNPL products. Management forecasts the net loss / ANR for BNPL in 2Q22 to be in the range of 4.5% to 5%. By comparison, FY21 net losses / ANR sat at 3.5%.

Management commentary

Hummgroup CEO Rebecca James commented on the company’s growth trajectory, saying:

We are extremely pleased with the growth momentum across the Group considering key markets were predominantly in lockdown during the quarter. BNPL growth remains strong with humm ‘Little things’ in Australia up 157% in 1Q22 which more than offset the smaller growth of 3% in ‘Big things’ which was impacted by lockdowns.

The Company’s overall volume growth of 40% highlights the advantages of our diversified portfolio offering products able to finance smaller and larger items seamlessly, for both consumers and SMEs.

Humm share price snapshot

The Humm share price is down 18.2% year-to-date, broadly in line with the struggling BNPL sector.

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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 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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