The Splitit Ltd (ASX: SPT) share price has gone up 30% so far in reaction to the release of the FY19 report.
Splitit offers consumers the ability to split the purchase price of basic products (e.g. lemons, toilet paper or both). Shoppers can split their purchases into up to 36 interest-free monthly payments using their existing Visa or Mastercard.
Splitit’s Soaring FY19 Result
Splitit reported that its revenue from continuing operations increased by 193% to US$798,000, which was driven by higher merchant fees. Total payment volume increased by 134% to US$34.4 million.
Active merchants increased by 121% to 509 and unique shoppers rose by 228% to 197,000.
Splitit revealed that gross profit rose by 468% to US$721,000, showing the scalable nature of the business.
Looking at some of the other expenses, research & development expenditure rose to US$1 million to improve its systems and platform. Sales & marketing jumped to US$1.8 million to engage with larger scale merchants. Other expenses rose to US1.9 million as it completed its ASX listing and appointed key staff.
Splitit reported its net loss worsened by 216% to US$3.8 million reflecting all of the increased costs above.
Splitit finished the half at 30 June 2019 with US$23.7 million of cash after raising $12 million in the IPO and raising an additional share purchase plan in June 2019.
Why Is Splitit Different?
Splitit says it’s differentiated because shoppers aren’t charged interest or late fees for their purchases or late fees and don’t incur penalties if they miss an instalment it is simply reverted to the terms of the credit card.
It isn’t an alternative financing solution, it works within the pre-aproved limits of a shopper’s existing credit card. There’s zero friction at the checkout because it offers instant approval and it claims to be the only solution that is truly global.
Is The Splitit Share Price A Buy?
In the first half Splitit signed a partnership with EFTPay to supply merchants in Hong Kong and Macau, it signed a new partnership with payment service provider GHL, and it signed with US eCommerce provider Ally Commerce.
It’s doing all the right things to expand its business, but it’s not the type of business I’d buy for my own portfolio. I’d much prefer to buy the reliable shares in the free report below instead.
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