Since commencing a strategic business transformation just 9 months ago, digital payments company Novatti Group (ASX: NOV) has reported progressive results of their pivot to a market and customer-centric approach which has yielded new business from major players in the BNPL, food delivery, accounting and accommodation sectors.
The implementation of a market and customer-led strategy has proven instrumental in Novatti’s positive performance, evident in the first half of FY24. During this period, Novatti witnessed a notable 12.1% surge in revenue ($21.4m), coupled with an 11% reduction in expenses ($15.2m) compared to the previous half-year.
Those figures do not include $1.5 million worth of recent client wins reported by CEO Mark Healy, who has been spearheading the financial turnaround since taking the reins of Novatti in June 2024.
“Since streamlining and integrating the previously fragmented and independent business units into the Payments AU/NZ division in Q2 of FY24, it has been pleasing to see the results of our strategy reflected in new and extended commercial engagements driven by our market led, customer focused approach,” said Healy.
Novatti’s Payments AU/NZ division has particularly thrived under this new approach, showcasing increased commercial engagements and market expansions.
Notable achievements include the extension of a long-term partnership with a major Buy Now Pay Later (BNPL) operator, projecting transaction volumes exceeding $1 billion in 2024 which would be an annual increase of 25%.
Healy also confirmed that Novatti has been engaged by one of Australia’s largest food delivery platforms for payment services. While deeper details were not disclosed, Novatti offers a range of merchant services and card issuing programs that are commonly used by food delivery operators to eliminate the need for cash usage.
In New Zealand, Novatti’s foray into the market is gaining momentum with confirmation a client has deployed more than 3,000 Novatti-issued cards within the first month of the partnership.
On top of that, Novatti confirmed that its successful ChinaPayments business, which facilitates payments between Asian currencies and Australian Dollars, will be expanding into New Zealand. Amongst the first of those customers to be serviced in New Zealand will be an accommodation provider that has more than 100 locations throughout AU/NZ – possibly UniLodge, which engaged additional Novatti services last month in Australia.
“Once operating licenses are finalised in New Zealand for a range of Asia-related payment services already offered in Australia, Novatti can leverage its existing payments technology to expand further into New Zealand with minimal additional operating expense,” added Healy.
“This is further complemented by existing Novatti clients also operating in New Zealand that can utilise more services as part of Novatti’s streamlined offering and platform”
The contract wins and extensions come at a time when Novatti has also confirmed the commencement of a $4 million cost reduction program. Leveraging his experience leading larger global payments companies, Healy was confident that the streamlining of business operations would have no adverse impact on revenue.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, bloodstock enthusiast and former Analyst.
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