If you’ve ever sat down at a restaurant and ordered your meal by scanning a QR code on the table, you’ll know it is a major trend in hospitality which has undergone a digital transformation. It’s a trend that digital payments company Novatti Group (ASX: NOV) is thriving in, adding one of the fastest growing QR code platforms to their growing client list of businesses keen to best digitise their operations to meet customer trends.
Since announcing $1.5 million in fresh revenue in April 2024, Novatti has followed up with another group of wins that include the QR code ordering platform and an international wine distributor, as well as extending their merchant footprint with a major fitness chain operator and completing the integration into a university tuition payments platform. Collectively, these engagements are expected to see more than 500 new merchants onboarded to Novatti’s digital payments platform which enables businesses to accept payment from cards and digital wallets.
Of those clients, the QR code ordering platform will provide Novatti with access to more than 300 merchants in the food and beverage space, while the international wine distributor has a retail distribution network of approximately 200 locations nationwide.
Integration with the university services provider will open up an addressable base of approximately 30 universities to the Novatti payments ecosystem as part of Novatti’s focus on the education sector. Independent of that deal, one student union has also engaged Novatti for bill payment services that will be marketed to the university’s 36,000 international students next month in time for tuition and bill payments for the July semester.
Similarly, the fitness client has added 46 new merchant outlets to Novatti’s payments acceptance platform in the past two months.
As of 31 May 2024, Novatti had 722 merchants accepting payments via their platform which is a 15.7% increase since the start of FY24. Upon completion of the new merchants being onboarded, Novatti will be servicing more than 1,200 merchants.
This round of commercial wins are part of Novatti’s refreshed marketing strategy under the current executive leadership team that took over in FY 2024.
The turnaround strategy has been led by global payments leader Mark Healy as CEO who restructured Novatti from a group of independent businesses with high cash consumption, to a customer-focused business where Novatti is winning mid-sized clients and software partnerships by offering a unified payments ecosystem in a single relationship. This unique offering enables merchants the ability to source the optimum tailored payment solutions they need from one provider.
“These ongoing wins demonstrate how Novatti’s market-led, customer focused approach is winning support from Australian businesses,” said Healy.
“It is particularly pleasing to see clients seeking extended Novatti services following our shift in strategy, which has been a clear benefit of simplifying the business to service cross-functional payment needs. This is part of the broader momentum we are witnessing across the business, coming off the back of a record quarter of revenue in Q3 FY24.
“Furthermore, we have now fully implemented our $4m annualised cost reduction program. A further $3m in annualised costs will also be removed from the business in Q1 FY25. These savings form part of the plan to achieve positive operating cashflow by the end of H1 FY25.”
These latest commercial deals join the BNPL and food delivery platform deals announced in April at a time where Novatti had been undertaking its $4 million cost reduction program to streamline the business. The process has seen 12 independently operated business units fused into 4 divisions with cross-functional teams that ensure clients can engage multiple payment products through a single relationship.
Despite the cost reductions, Novatti has increased its revenue, delivering $12.4 million in revenue for the March quarter which was a record for the Melbourne-based fintech that is gathering momentum under its new executive leadership and marketing strategy.
The benefits of this streamlined approach were evident in Novatti’s March quarter report where quarterly revenue was up 21% and quarterly expenses down 23% since the business transformation began in July 2023.
Mitch Korver is a Business Writer focused on high-growth companies listed on the ASX in the small and medium cap space.
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1 Comment
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