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Credit Intelligence (ASX:CI1) grows profit and revenue in latest half-year results

Finance
ASX:CI1      MCAP $9.685M
24 February 2021 16:45 (AEST)
Credit Intelligence (ASX:CI1) - Chairman, Jimmie Wong

Source: StockPal

Credit Intelligence (CI1) is trading red today despite bolstering both revenue and profit of the first half of the 2021 financial year.

The debt management and payment collection specialist said revenue for the six months to the end of 2020 increased by 21 per cent to just under $7.4 million compared to the $6.07 million over the same half-yearly period in 2019.

This underpinned a 25 per cent increase to net profit after tax for CI1, which came in at around $1.6 million compared to the $1.25 million over the prior corresponding period.

However, given some important recent purchases for CI1, the company has not declared any dividend for the first half of the financial year.

Credit Intelligence said its Hong Kong business performed in line with the year despite the onset of COVID-19 in 2020, with its core business of bankruptcy and individual voluntary arrangement services in Hong Kong continuing to trade well.

The company said it expects deferrals from the coronavirus will show up in the coming year.

However, strong government support for small businesses in Singapore meant results from CI1’s subsidiary, ICS Funding, were well-below the year before. However, CI1’s Singaporean Hup Hoe Credit lending businesses performed well over the half-year, meaning full Singapore results were mixed.

Nevertheless, Credit Intelligence Managing Director Jimmie Wong said the company’s half-year performance was steady despite challenges faced as a result of COVID-19 — particularly considering the key Australian purchases made over the half-year period.

“We have significant resources and energy being applied to the development of our new exciting businesses, YOZO and Chapter Two,” Jimmie said.

The new Australian businesses

Credit Intelligence bought a 60 per cent interest in Chapter Two Holdings in July 2020 as part of its Asia-Pacific expansion strategy.

The in December, CI1 bought a 60 per cent interest in Australian fintech business YOZO.

Together, the purchases are designed to help Credit Intelligence build up a full suite of debt management solutions for Australian consumers and create a one-stop-shop for small-to-medium businesses (SME) across the country.

On top of this, the YOZO tech platform helped Credit Intelligence build a buy now, pay later (BNPL) service for SMEs, which it launched this week.

Credit Intelligence said that while the Chapter Two and YOZO purchases are not yet material, but both companies have strong potential and an exciting future.

Company shares soared from three cents each to over 11 cents each in just one week following the acquisitions and the launch of the SME BNPL service.

As such, today’s red day could be a mixture of investors taking profits from the company’s strong recent performance and the mixed Singapore results.

Shares in Credit Intelligence are down 19.23 per cent at 3:08 pm at 6.3 cents each — still well-above their 2021 average, but below yesterday’s record close.

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