Credit Clear makes ‘exceptional progress’ in 2022 following transformational ARMA acquisition

It’s been a record-breaking year for account receivables technology company Credit Clear (ASX: CCR), with chairman Hugh Robertson saying “exceptional progress” had been made particularly since the “transformational acquisition” of ARMA Group in February.

At the annual general meeting this week, Mr Robertson said 2022 had brought with it a new chief executive officer in Andrew Smith, a fresh board, and commercial validation of the company’s technology.

Attention to sales also bumped Credit Clear into a full cash flow positive territory.

The September quarter 2022 (Q1 FY2023) was Credit Clear’s first cash flow positive period with record revenue of $8.9 million generating $531,000 from operating activities.

“And to make things better, the current environment is tailor-made for , with the changed economic conditions providing a tailwind from heaven for the company,” Mr Robertson said.

“Rising interest rates, monetary tightening and a strange sort of credit squeeze have all conspired to make every organisation look far more closely at their receivables ledger and start to act on outstanding debts.”

Mr Robertson added that consumers had been “aggressively encouraged” to “fractionalise their debts” by paying them in instalments.

Combined Credit Clear-ARMA offering

Credit Clear’s digital recovery platform allows clients to “encourage” their customers to repay debts in a way that “enhances the customer’s experience”.

Mr Robertson said the results with Credit Clear’s platform have been “remarkable” as the company’s technology leads “the digital transformation of the account receivables industry”.

ARMA is a more traditional collections business with a “powerful sales culture”. This business has been combined with Credit Clear’s technology to create a fully integrated, digitally-led, hybrid account receivables provider.

The combined business now has a digital first approach, which is supported by traditional collections.

New clients are currently joining the Credit Clear group at 30 per month. Additionally, 1 million payments have now been processed via Credit Clear’s platform with digital payments hitting $15.28 million in Q1 FY2023 – up 19% quarter-on-quarter.

Credit Clear’s current revenue run rate has now reached $35.7 million per annum.

Near-term outlook

This rapid growth is not expected to slow down, with Credit Clear anticipating revenue will rise to $100 million per annum within the next three years.

The revenue will underpin EBITDA growth to $25-30 million per annum as 4-5% of the addressable market is captured.

To shore up this anticipated expansion, Credit Clear is continuing to upsell to existing clients, as well as cross selling.

The company is also in discussions with ASX 100 companies and tier one government and unlisted organisations.

While bedding-down the Australian market, Credit Clear also plans to expand its solutions internationally.