Credit Clear targets positive cash flow by mid 2022

Credit Clear ASX CCR cashflow positive mid 2022
Credit Clear expects to be cash flow positive from July 2022, with estimated annual revenue exceeding $35 million.

Credit Clear (ASX: CCR) has grown its revenue to a record $6.1 million for the March quarter, which is an 88% increase on the previous December quarter and 117% rise over the same period last year.

The receivables management provider is now on course to be cash flow positive from July 2022, with a projected annual revenue of over $35 million, based on March revenues of $2.9 million.

This targeted revenue run rate does not include any anticipated income from its recent deal with Techub in South Africa or new clients, which are in the process of being onboarded.

Commenting on the quarterly results, Credit Clear chief executive officer Andrew Smith said the company “has emerged as a leader in the global account receivables industry.”

“We have proven technology that is clearly differentiated from any other in the market. With an end-to-end hybrid collection offering that provides best-in-class solutions at every stage of the collections lifecycle.”

He said the restructured management team would be a key driver for success going forward: “our reshaped executive team has the expertise and relationships to take our technology and services to a global market.”

“As we turn profitable from July 2022, we also have positive cash flow to reinvest into research and development to further our technology and the evolution of our platform.”

Combined with a recent $4 million capital raising via a share purchase plan, Credit Clear is on the verge of transforming its financial position into the second half of the year.

New client growth

During the March quarter, Credit Clear signed 65 new clients from a range of industries including financial services, consumer, insurance, utilities, government, trade credit and automotive.

Some of these clients are still in the process of being integrated onto Credit Clear’s platform, meaning their resulting revenue will be added in the coming weeks and months.

The company highlighted these clients that were yet to be fully onboarded will have a ‘material impact’ on the bottom line.

ARMA acquisition and renewed team

Credit Clear’s executive team was revamped during the quarter following the acquisition of Australasian debt collection service company ARMA.

The $46 million deal saw over 400 active clients acquired in the process ready for Credit Clear to scale its digital billing and communications technology platform.

In the process former ARMA head Andrew Smith came on as chief executive officer, Shane Ashton as chief operational officer and Eddie Smith as group head of sales.

International expansion

With growth consolidated in Australia, Credit Clear has its eyes set on overseas markets for further expansion.

This strategy has begun with the deployment of Credit Clear’s digital platform for Techub in South Africa last week.

The roll-out of Credit Clear’s digital accounts receivable platform supersedes a three-month pilot agreement with Techub.

Techub will now fast-track the roll-out of Credit Clear’s platform across its US$1 billion debt portfolio.

Techub confirmed that iSON Xperiences, Africa’s largest BPO service provider had taken a strategic shareholding in its holding company CSS Group.

Credit Clear says this opens up significant new markets across 18 countries including multiple African nations, India and the United Arab Emirates.

Credit Clear has stated it is looking for similar opportunities in other international markets.

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