On the 13th of January 2020 Prophet called smartpay ASX a BUY at a price of 53 cents, since then smartpay’s share price has exploded! Today we take a look at SMP shares and see what’s in store next.
Smartpay Share Price
Smartpay closed off the week with a share price of $0.76. Up a decent 43.4% from our BUY recommendation. At it’s current share price SMP shares are up 60% over the course of a year, and an amazing 360% over a 5-year period. Smartpay ASX has a current market capitalization of $182.2 million.
In January SMP shares set an all-time high of 0.985. The current share price is in the middle of its 52-week range of 0.48-0.985. It’s easy to see why Smartpay is featured in many great articles.
About Smartpay ASX
SMP Holdings are a payments terminal business based out of Auckland, New Zealand. Smartpay is Australia and New Zealand’s largest independent full-service EFTPOS provider. They service over 25,000 merchants with approximately 35,000 secure and feature-rich EFTPOS terminals. More widely they offer payment & data management solutions for retails and merchants.
The NZ & Australian business operations differ drastically. The NZ business is profitable, mature and has been moving along the past few years at a steady pace.
In comparison the Australian business has been growing terminals and revenues at exceptional rates. Management have indicated that this side of the businesses will be the focus of Smartpay. Which is evident with Australian revenues showing to surpass NZ revenues this month.
SMP Shares Big Announcement
Preliminary Final Report
On the 27th of May, Smartpay ASX released its preliminary final report. In this report we saw excellent results from SMP shares. Overall revenues were $33.8m, up 19.7% from the prior year $28.3m with strong growth from Australian Revenues.
This results came from continued effort to grind their marketing and sales activities targeting Australian consumers. Smartpay have mentioned that they expect the Australian side of the business to be running at breakeven when EBITDA rises to between $10-12m. Or revenues of around $20 million, which it is fast approaching.
- Revenue $33.8m, a 19.7% increase on the prior year $28.3m
- Australian acquiring transactional revenue:
- $17.1m, an 80.0% increase on the prior year $9.5m
- Monthly acquiring revenue grew to $2.2m / month
- EBITDA* $7.6m, a 2.7% increase YOY $7.4m. Run-rate EBITDA at March 2021 $9.8m
- Australian transacting terminals fleet grew to 6,754 at March 2021
- Continued increase in acquiring margin through the year
- Net debt, excluding convertible notes, reduced to $4.7m, $19.4m at March 2021
- After Tax Loss of ($15.2m)
How did the Smartpay Share Price Respond?
On the day of the announcement the smartpay share price jumped 5%, from $0.75 to $0.785, before returning to the $0.75 the following day. This announcement was in-line with market expectations, and had no real earnings surprise despite being an excellent result.
Summary and Outlook
FY21 demonstrated the resilience of SMP’s New Zealand business and validated their successful go to market strategy in the Australian market. Despite SMP being in the early stages of the growth phase in Australia the business is scaling quickly.
FY22 will see Smartpay continue to develop their payments offering in both countries, broaden awareness of the Smartpay brand and competitive product offering in Australia and further scaling their Australian revenue which is expected to deliver operational leverage and EBITDA growth.
What Can We Expect As Revenue Going Forwards?
We expected AU revenue to surpass that of NZ revenue in less than a year. As promised in Q4FY21 SMP shares reached our expectation. The business also boasts a large Gross Margin of ~30%, with no debt, growing revenues and a large margin we expect SMP to continue to perform well.
Quarterly Revenue Indicators- Unaudited
|NA $’000||Q4 FY21||Q4 FY20||Variance $||Variance %||Q4 FY21||Q3 FY21||Variance $||Variance %|
|Total Consolidated Revenue||10,046||7,376||2,667||36%||10,046||9,268||778||8%|
|Australian Acquiring Revenue||5,784||2,932||2,852||97%||5,784||5,020||715||15%|
It is worth noting that the Reserve Bank is looking to introduce “least cost routing” for the major big 4 bank payment platforms. which will help level the playing field between the big 4 and smaller rivals. We still expect more room in the tank for SMP over the next few months.
Smartpay ASX Insider Trading
Over the past year we have seen significant increases from institutional and insider investors;
- 22 May 21: Moelis 6.33% from 5.33%
- 29 Dec 20: Anacacia Pty Ltd 9.76% [22.66m] from 0.96%
- 29 Dec 20: Microquities 14.91% [34.61m] from 16.76% [34.32m] dilution
- 11 Dec 20: Moelis 5.33% initial purchase
- 26 Nov 20: Milford 11.08% from 9.92%
Last week Moelis increased their holding in SMP to 6.33% from 5.33%.
Smartpay Share price: SMP Shares Fundamentals
|Smartpay Share Price||$182.21 Million|
|Market Cap||209.47 Million|
|Average Volume 1-month||525,571|
Smartpay Share Price: Technical Analysis
The general consensus within the Technical Analysis community is currently bullish on SMP shares.
Here’s a breakdown of the detailed Technical Factors;
Learn How We Analyze A Company:
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