Today Humm Group (ASX:HUM) released their 4Q21 results to the market with head-line NPAT increasing a massive 121% to $68.4million. Will Humm Group Shares Continue to Deliver Exceptional Results?

What did Humm Group Shares announce?

From this mornings announcement 19th July 2021. HUMM Group (ASX:HUM) reported some excellent results with the group reporting significant volume increases in the business at 57.3% on transaction volumes. Their BuyNowPayLater segment increasing at the fastest rate of 68.7%.

The companies strategy seems to be working, enabling merchants and customers to be onboarded faster with the New Humm Tap Product.

Humm launched in the United Kingdom on 30 June 2021 with a focus on the ~A$200b home and
home improvement, health, automotive, and luxury retail verticals.

Humm Group Shares
Humm Group Segment Performance

ASX:HUM pointed investors towards the record volumes in their BNPL segment and the significant growth experienced by their commercial and leasing business. Customer numbers were also up 19.7% to 2.7million.

“hummgroup’s continuing momentum is reflected in all segments performing strongly in 4Q21 to achieve record volumes across all products of $775m. Quarterly volume growth of 57% is a clear indicator of the benefits of hummgroup’s diversified portfolio. We are confident in carrying this volume momentum into FY22 as our products continue to evolve and mature, we execute on our international expansion, and we deliver on our partnership strategy.

CEO Rebecca James on this mornings annoucement

Key Metrics Provided in the update were as follows

Prophets Trusted Affiliate Partner
  • hummgroup 4Q21 transaction volume of $774.9m, up 57.3% on pcp
  • Record quarterly BNPL segment transaction volume of $304.9m in 4Q21, up 68.7% on pcp
  • Cards (Australia and New Zealand) 4Q21 transaction volume of $287.5m, up 44.3% on pcp with spend continuing to return across key categories
  • Commercial and Leasing transaction volume in 4Q21 of $182.4m, up 62.2% on pcp
  • Total hummgroup customers of 2.7m as at 30 June 2021, up 19.7% on pcp
  • Continuing improvement in net loss (gross write-offs net of recoveries) of $30.2m in 4Q21, down 20.3% on pcp
  • 1,362 new merchants integrated across Australia and New Zealand in 4Q21 including strong growth in key verticals of health, luxury retail, home improvement, and automotive
  • Based on unaudited accounts, Cash Net Profit After Tax of $68.4m, up 121.1% on pcp

The Prophet BNPL Index:

HummGroup has been one of the best performers to date on the Prophet BNPL index, down only ~10% for the year compared to an average of (-16%) for the broader benchmark. The best performers on the index to date are Sezzle (ASX:SZL) and Zip Co (ASX:Z1P) returning 49% and 26% respectively at the time of writing.

Prophets BNPL Index Tracker

Humm Share Price snapshot

At the time of writing, shares are trading hands up 5.1% to $1.03 per share on higher than average volume. However the 1-year price performance the shares are still down 16.5%.

The company has a current market capitalisation of $485million, with $495million shares on issue.

Humm Group Share Price 1 Year

Recent Humm Stock Developments

Expansion to the UK

On the 30th of June HummGroup announced to the market that they were looking to expand their product to the United Kingdom. This will give customers the opportunity to shop in-store and online and pay over instalments. Repayments consist of interest-free payment options from 10 weeks to 60 months. The strategy being employed in the UK seems to be very similar to their approach in the Australian Market.

Humm/TAPP instore feature

Humm/TAPP instore feature, on the 3rd June, the group announced that the company was launching the HummTap Feature allowing users to tap a digital card at any merchant in Australia and repay this in the same way typical Humm Purchases are made. This greatly expands the addressable market size of the product and will allow the company to have a much further reach with consumers.

TAPP removes the need for merchants and Humm to invest tens of thousands of dollars and several months integrating into in-store point of sale systems. With immediate access to transacting Humm customers, TAPP makes it easier and more attractive for merchants to include Humm as an in-store payment option. Our customers now have a seamless and intuitive in-store payment method at every Humm merchant, in a familiar digital wallet experience.

CEO Rebecca James

Partnership With WestPac (ASX:WBC) to Bring Bundll to New Zealand

bundll, the first BNPL anywhere product globally, will be the exclusive BNPL product promoted to New Zealanders by Westpac NZ. The new partnership is the first contract under hummgroup’s strategic global agreement with
Mastercard and will see Bundll available to all New Zealanders, with preferential benefits offered to Westpac NZ customers.

Whilst it’s not particularly clear what is meant by preferential benefits, and the details of what the agreement actually means for the company are quite light on. This may mean increased uptake of the product to the New Zealand population.

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