Earlypay (ASX:EPY) share price rockets 9% on 'material uplift'

The company's shares zoomed higher today…

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The Earlypay Ltd (ASX: EPY) share price finished Thursday's market session higher following a positive trading update from the company.

At the closing bell, the payment advance company's shares ended 9.52% higher to 46 cents.

How did Earlypay perform for Q1 FY22?

Investors were fighting to get a hold of Earlypay shares after the company reported a robust result for the first-quarter of FY22.

According to its release, Earlypay experienced total transaction volume (TTV) of $569 million, up 40% on the prior corresponding period. This was predominately driven by organic growth in client numbers.

Revenue accelerated to $159.1 million, representing a 52% increase on Q1 FY22. The similar trend came from higher interest income on higher utilisation (LVR) of client facilities in lieu of government stimulus for small to medium business enterprises.

On the equipment finance portfolio, its loan book was steady at $94.3 million through the first-quarter lockdown. The company is anticipating growth to resume in the following quarter. The loan book is expected to swell to $99.6 million.

Earlypay CEO, Daniel Riley commented:

We are pleased to report an outstanding Q1 FY22 result, which shows material growth across all Invoice Finance and Trade Finance metrics. Momentum has continued through October with Earlypay achieving record monthly Transaction Volume of $211m, with a further acceleration in volumes anticipated as lockdown restrictions end in NSW and Vic.

Earlypay upgrades FY22 guidance

Due to the solid performance of the first-quarter along with favourable trading conditions, Earlypay has upgraded its FY22 guidance.

As such, the company is forecasting above 40% for net profit after tax (NPAT) over FY21. The main drivers of growth are projected to come from its core Invoice Finance product.

In addition, Earlypay received a 25% increase on the facility limit for its primary Invoice Finance warehouse to $125 million. The extra funding will help the company fuel growth by aggressively competing against the banks and non-large bank lenders.

The company also released its annual general meeting (AGM) presentation to shareholders today, covering the above results.

Earlypay share price snapshot

Over the last 12 months, the Earlypay share price has performed relatively well over the period, up around 30%. The company's shares hit an all-time high of 53 cents in August, before treading slightly lower ever since.

Based on today's price, Earlypay commands a market capitalisation of around $130.05 million and has approximately 279.67 million shares outstanding.

Motley Fool contributor Aaron Teboneras 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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