Humm Group posts strong half-year results ahead of UK and Canada launch

Humm Group ASX HUM half-year results 2021 UK Canada launch BNPL
Humm has recorded a 293% increase in total BNPL transactions compared to the 2020 first half.

Humm Group (ASX: HUM) has reported solid growth in its customer base and buy now, pay later (BNPL) transactions over the last six months, placing it in a good position to enter the United Kingdom and Canadian markets in the second half.

The payment solutions provider has almost quadrupled its total BNPL transactions in the first half of the 2021 financial year compared to the same period a year ago, from 384,000 to 1.5 million.

Total BNPL volumes were up 13.8% on the previous corresponding period to $473 million, with Humm’s Little Things product volumes up 46.5%.

Active customers also grew by 40.4% to 2.6 million, with 1.3 million total app downloads over the July to December 2020 period.

The company recorded a net profit after tax (NPAT) of $38.6 million, reflecting a 15.9% increase on the first half of 2020 and a cash NPAT of $43.4 million, up 25.8% on last year.

Today’s results follow Humm’s announcement late last week that it has launched its hummpro platform catering for small to medium enterprises (SMEs).

It also comes ahead of the company’s international expansion plans, with launches of the Humm platform in the UK and Canada expected in the second half of FY2021.

Humm Group chief executive officer Rebecca James said the company has worked hard to improve its customer engagement and its credit decisioning platform, which has directly benefitted the underlying performance of the business.

“At a time when we’ve needed to respond to the impacts of COVID-19 on both our business and our customers, these improvements have given us the agility to do so and come out of the pandemic in the strongest possible position,” she said.

Small business product just launched

At the end of last week, Humm announced it had launched its business BNPL product hummpro, aimed at displacing the $30 billion business credit card and line of credit market by enabling SMEs to borrow up to $30,000 in funds.

“With the launch of hummpro, our BNPL product for SMEs, we now have four clear digitally-led product propositions, that enable seamless approvals for big, small or business-related purchases,” Ms James said.

Humm’s other products include the original humm platform, as well as bundll and FlexiFi.

“Locally, we’re pleased to see solid growth in our BNPL product humm. New and existing customers are using our product more frequently, especially online and for smaller ticket items, helping to create customer engagement in the humm ecosystem,” Ms James said.

“This growth was achieved while we continued to take a prudent approach to credit risk and approvals in the first half of the financial year.”

According to the company’s half-year report, recently-launched bundll – the “buy now pay anywhere” product that uses the Mastercard network – has already attracted 50,000 customers.

International expansion plans

Humm also today announced the launch of its BNPL product humm into the UK and Canadian markets in the FY2021 fiscal year.

According to the company, a significant opportunity exists to displace outdated traditional point of sale finance and capture higher value purchases in both markets.

BNPL adoption is still in its infancy in the UK and only currently represents about 1% of the total credit market.

“With a market opportunity of $778 billion and as the only player servicing both the UK and Ireland, humm clearly has a differentiated offering for merchants and customers,” the company stated.

It said strong progress has already been made with over 200 retailers signed including Pamela Scott, instasmile, McGuirks Golf, River Medical and Therapie Clinic.

Meanwhile, Canada is estimated to have a market opportunity of $613 billion.

“The Canadian market is attractive with strong existing relationships and a complementary regulatory framework,” Humm said.

The company added its plans are progressing well for this market entrance with “the appointment of the board and senior executives imminent”, active discussions with a number of market participants and “further strategic alliances on launch to be announced”.

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