Earlypay (ASX:EPY) share price leaps 9% as profits, dividends surge

The company has been a success story over the last 6 months.

| More on:
man jumping along increasing bar graph signifying jump in alumina share price

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

Key Points

  • Earlypay shares rocket on back on record result for H1 FY22
  • NPATA came in at $7.5 million, an increase of 110% over the prior comparable period
  • Upgraded guidance for the FY22 full-year in the range of $13 million and $14 million

The Earlypay Ltd (ASX: EPY) share price is in fine form today following a positive trading update from the company.

At the time of writing, the payment advance company's shares are up 9.30% to 47 cents a pop.

Earlypay continues its growth story

Investors are snapping up Earlypay shares after the company reported a robust result for the first-half of FY22.

According to its release, Earlypay achieved Net Profit After Tax before amortisation (NPATA) of around $7.5 million. This represents an increase of 110% over the prior corresponding period and is well ahead of forecasts.

Earlypay attributed the strong result to its core Invoice Finance product which is offered to small and medium-sized enterprises clients.

Total transaction volume (TTV) for the 6 months stood at $1.2 billion, up 35% on this time last year. The Equipment Finance business also saw substantial improvement in new originations in recent months and returned to growth.

Earlypay noted that January which is normally impacted by holiday seasonality performed ahead of expectations. This was driven by organic growth in client numbers and continued high utilisation rate of Invoice Finance facilities.

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

As such, the company is anticipating NPATA of between $13 million and $14 million, which is 60% higher than the result achieved in FY21.

The strong profit result is expected to materially increase the first-half FY22 dividend compared to pcp. Earlypay's dividend payout ratio will remain at 60% of NPATA across the full year.

Management commentary

Earlypay CEO, Daniel Riley commented:

We are delighted to announce a record H1 FY22 result, which shows material growth in Invoice Finance. The stronger than expected earnings have been driven by record TTV, lower cost of debt and increased utilisation of proprietary technology to facilitate operating leverage for the business.

It is also pleasing to see the equipment finance book return to growth in recent months. Following the record first half and a notable pickup in SMEs looking for alternate funding, Earlypay has upgraded its FY22 NPATA Guidance from $13m+ to $14m+.

The company noted it will provide additional information in the release of its FY22 first-half results on 24 February.

Earlypay share price snapshot

It has been a solid 12 months for the Earlypay share price, rising by 23% over the period. Year to date, the company's shares are almost 10% higher.

Based on valuation grounds, Earlypay commands a market capitalisation of around $132.29 million and has approximately 281.47 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.

More on Financial Shares

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their shares on a laptop.
Earnings Results

Why this ASX 300 share is leaping 14% despite being branded a 'sell'

Falling profits are putting investors off the fund manager.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Earnings Results

Up 45% in a year, this ASX 200 insurance stock is going gangbusters on strong earnings

Earnings were strong enough for a special dividend.

Read more »

A susccesful person kicks back and relaxes on a comfy chair
Financial Shares

Buying Soul Patts shares? Here's what you're really buying

An investment in Soul Patts shares is really a bet on a sprawling asset portfolio.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Financial Shares

Suncorp share price marching higher on 14% earnings boost

ASX 200 investors are bidding up the Suncorp share price on Monday.

Read more »

A man with arms spread yells as he plunges into a swimming pool.
Earnings Results

Which ASX All Ords stock is diving 18% on FY23 results?

Investors aren't happy with the company's 32% decline in earnings per share in FY23.

Read more »

Happy man working on his laptop.
Financial Shares

Up 21% in a month: Can GQG shares climb even higher?

These experts reckon GQG shares have plenty of room to climb higher.

Read more »

Man raising both his arms in the air with a piggy bank on his lap, symbolising a record high.
52-Week Highs

2 ASX 200 financial shares hitting 52-week highs on earnings results

These two ASX 200 financial shares hit new 52-week highs after the companies released their results.

Read more »

Man pointing at a blue rising share price graph.
Earnings Results

Up 55% in a year, GQG share price charging higher again on surging revenue results

ASX investors are sending the GQG share price soaring today.

Read more »