The Splitit Ltd (ASX: SPT) share price is up 4% after the buy now, pay later business released its FY21 half-year result.
Splitit is a BNPL business that allows shoppers to buy things through instalments, using their existing credit card.
Split’s HY21 result
The company’s merchant sales volume (MSV) grew 94% to US$172.5 million. Gross revenue increased by 79.7% to US$5.5 million.
Future growth will be driven by the number of merchants and shoppers that are part of its network. Total merchants increased 167% to 2,800 and total shoppers jumped 83% to 566,000.
However, the statutory profit after tax worsened by 109% to US$18.8 million.
The company spoke of other initiatives to help the business develop further.
Splitit said that recent innovation SplititPlus launched to accelerate further merchant adoption, plus expanded white label product capability which represents a “new and highly scalable revenue opportunity” in the future.
It also said that its credit card network grew significantly with the addition of the new UnionPay International partnership.
During the period. it consolidated its debt facilities to reduce its cost of funds and improve its margins.
Splitit Chair Dawn Robertson said: “Recent BNPL M&A activity has highlighted sector wide opportunities, which is likely to accelerate the strategic focus and commercial integrations across the entire sector. Splitit remains uniquely placed within the credit card / BNPL ecosystem with extensive commercial relationships that have only just began to scale. Providing a point-of-sale solution to improve retailer conversion whilst leveraging a consumer’s existing credit, puts Splitit at the intersection of two significant markets – credit cards and BNPL. We believe this is a unique point of difference in an otherwise increasingly crowded market.”
CEO change
Splitit also said that its CEO, Mr Brad Paterson, will cease in the role and Mr John Harper will be the interim CEO immediately.
The board noted that the company has grown significantly under Mr Paterson’s leadership, but to maintain momentum it believes that a proactive change is necessary to keep building.
Splitit said that Mr Harper is a “veteran retail sector executive with a proven track record of leadership in retail enterprises for Macy’s as its chief operations officer.” The board said that the merchant experience and deep networks that Mr Harper brings will be critical for Splitit.
Is the Splitit share price an opportunity?
The Splitit share price has fallen more than 75% over the last year. With just US$5.5 million of revenue, the BNPL business is priced expensively for its current size. A lot of growth is expected, but that growth seems to be slowing. It’ll be interesting to see if growth can return under the new CEO.
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