Cirralto (ASX:CRO) primed for further growth through new platforms

• Transaction services business Cirralto (CRO) has more than doubled its quarterly revenue and is setting itself up for further growth
• Quarterly Average Revenue Per User also grew by 57.5 per cent, from $21.17 to $33.40, largely due to the launch of the SpendaCollect platform
• A $2.7 million capital raise also bolstered the company’s finances, enabling Cirralto to repay all debt and end the period with almost $2 million in the bank
• The company anticipates the Appstablishment acquisition to be finalised by the end of 2020, adding around $500,000 in annual sales and almost $2 million in R&D grants
• While there may be few certainties in the new Covid economy, Cirralto is well-positioned to profit from the need for contactless digital payment solutions
• Cirralto is trading 15.7 per cent lower for 4.3 cents

Transaction services business Cirralto (CRO) has more than doubled its quarterly revenue and is setting itself up for further growth.

Strong quarter

The company’s quarterly revenue grew by 118 per cent from $82,313 to $179,745, and quarterly Average Revenue Per User (APRU) was up 57.5 per cent, from $21.17 to $33.40.

This is attributable to the July launch of the SpendaCollect platform — payment management software that enables businesses to collect debt from customers through integrated invoicing and notification systems.

The updated V2 software is expected to launch in December, which will add more features and functionality to the existing platform, providing further growth opportunities.

Cash receipts from customers grew by 30.5 per cent to $156,000 for the quarter.

A $2.7 million capital raise also bolstered the company’s finances, enabling Cirralto to repay all debt facilities and end the period with almost $2 million in the bank.

With a further $1 million in finance facilities available, the company is fully funded to pursue growth initiatives like the Appstablishment acquisition, marketing and customer onboarding.

The majority of the company’s quarterly spending of $430,000 went towards software development and legal and licensing costs related to the SpendaCollect platform.

The business also spent $725,000 on payments to related parties including the Managing Director’s salary, non-executive directors’ fees and software development fees for Appstablishment.

The company anticipates the Appstablishment deal to be finalised by the end of 2020, which should add in excess of around $1.9 million in research and development grants through FY2020, in addition to around $500,000 in annual sales.

The Outlook

While there may be few certainties in the new Covid economy, Cirralto is well-positioned to profit from the need for contactless digital payment solutions.

As consumers increasingly shift online, businesses have greater need for services like those provided on the SpendaCollect platform.

When coupled with changes to the federal government’s research and development tax incentives — which will see the merged Cirralto-Appstablishment entity eligible to apply for an additional $50 million in R&D funding — Ciralto is on a good footing to continue to grow.

Cirralto is trading 15.7 per cent lower for 4.3 cents at 12:42pm AEDT.